The Structure, Strategy and Geography of Green Certification Services

Abstract

The environmental and climate challenges facing our planet require more sustainable resource management solutions in the coming years. Environmental performance levels in the business community often reflect the need to meet laws and regulations (licence to operate) or green strategies that may involve innovation and branding of new business opportunities. In this respect, certification schemes can be used as a tool to integrate environmental engagement into daily activities, which according to Testa et al. (2014) is a procedure to plan, do, check and act. A certification project may include full-scale documentation, status reports, future goals, evaluations and plans for further action. This may be a way of identifying potential improvements that have positive environmental effects linked to energy use, material input or pollution. Companies may not least be motivated to improve their environmental performance if such investment generates positive economic returns (White and Noble 2013). Certification projects also include transparent performance indicators that are useful for both regulative purposes and branding. Many environmental certifications are thus oriented towards products. These certificates may be linked to voluntary programmes associated with, for example, organic foods, or compulsory programmes, for example, the labelling of energy products regulated through the European Union (EU) energy and energy-related product classification (Eur-Lex, Directive 2009/125/EC). However, a different category is certification management systems, which focus on the firm unit or the company as a whole.

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

1 Introduction

The environmental and climate challenges facing our planet require more sustainable resource management solutions in the coming years. Environmental performance levels in the business community often reflect the need to meet laws and regulations (licence to operate) or green strategies that may involve innovation and branding of new business opportunities. In this respect, certification schemes can be used as a tool to integrate environmental engagement into daily activities, which according to Testa et al. (2014) is a procedure to plan, do, check and act. A certification project may include full-scale documentation, status reports, future goals, evaluations and plans for further action. This may be a way of identifying potential improvements that have positive environmental effects linked to energy use, material input or pollution. Companies may not least be motivated to improve their environmental performance if such investment generates positive economic returns (White and Noble 2013). Certification projects also include transparent performance indicators that are useful for both regulative purposes and branding. Many environmental certifications are thus oriented towards products. These certificates may be linked to voluntary programmes associated with, for example, organic foods, or compulsory programmes, for example, the labelling of energy products regulated through the European Union (EU) energy and energy-related product classification (Eur-Lex, Directive 2009/125/EC). However, a different category is certification management systems, which focus on the firm unit or the company as a whole.

This chapter focuses on this second category of certification schemes, aiming to identify some of the infrastructure of the green economy-supporting services in Norway by investigating the suppliers and clients related to the accreditation and certification scheme. The following sections include a review and conceptual discussion of the certification industry based on international studies. This is followed by a summary of the environmental certification industry in Norway using open-source data on certification service operators and business. The empirical approach includes an analysis based on combining open-source search for certification service operators and business clients that are registered under the EU Eco-Management and Audit Scheme (EMAS), the International Organization for Standardization (ISO) 14001 and Eco-Lighthouse (Miljøfyrtårn) with geographical labels. The study includes an overview of the market sizes of these three certificate programmes. Further insight about the consultants in Eco-Lighthouse is available from data from the Official Register of Business Enterprises and Companies and information accessed from firm web sites. The data on the number of firms registered under these three certification arrangements is sorted by location and industrial sector. This research also includes information from in-depth interviews and written and verbal information from different stages of certification projects. The final section draws together some conclusions and linkages to the wider themes of this book.

2 A Review of the Literature on the Certification Industry

Some previous studies discuss the advice given to clients concerning the process around the stages of project implementation, reporting and accounting. Yet other studies focus on the characteristics and motivations of clients who are part of a certification scheme. Furthermore, the performance and competence of the business service firms supporting the certification projects have been studied. Other issues found in this literature concern the impact of policies and the overall environmental effects of the auditing and reporting projects. Some articles also discuss methodological issues related to the assessment exercise as well as the availability and quality of data suitable for research. An overview of the literature with specific references is presented here.

Certification projects can in some cases be conducted as a mandatory project initiated by buying companies either as a part of a pre-screening process in the search for new suppliers or as a way of verifying and auditing the quality of existing business partners. An existing certificate may even be a way of reducing the pre-qualification time in the process of negotiating new contracts. Certification requirements can be seen as a way of pre-screening potential supplier firms. An internationally approved form of certification such as ISO 14001 is almost seen as a passport that eases operations across borders (Bansal and Bogner 2002). Certification requirements from the authorities for import activities, for example, are a disadvantage for smaller firms that may lack the administrative capacity and resources to become certified.

Certifications have become a well-established and accepted domestic and international proof of licence to operate. Adopting these voluntary environmental standards can be used as a way to justify performance according to environmental expectations. The level of performance verified through a certification is a stamp of approval that may become commonplace for some industries (Potoski and Prakash 2005, 2013). Environmental certifications represent important voluntary standards that are diffused through trade (Marcoux and Urpelainen 2012). The certificates may also place the businesses in a stronger position in relation to investors seeking to reduce their financial risk from, for example, pollution damage or halted production in cases where legislated environmental standards are not met. A documented environmental standard can also count as a positive component in relation to recruitment.

The widespread diffusion of these standards may be seen as proof of a high degree of acceptance, but this loss of exclusivity also means that the process of obtaining certification has lost its first-mover advantage. The growing support of certification suggests that companies in environmentally sensitive industries with status as non-adopters may attract negative attention (Hartshorn and Wheeler 2003). Furthermore, the level of real environmental engagement among certification holders varies. Whereas some companies place environmental considerations at the forefront of their strategies, others limit this to a side effect of their business. Boiral (2007) labels the strategies of some companies as symbolic ritual action with limited environmental effect, whereas others use them to actively integrate environmental considerations. There are various reasons why the level of performance differs across companies. Limited reactive capacity in an organization to adopt strategies that meet these types of challenges or limited financial resources can explain differences in environmental performance.

Obtaining an environmental certification may involve strategic environmental knowledge that companies do not possess. Thus, certification can be considered a management tool. Certification schemes attract expertise to companies in terms of awareness, actions, reporting, auditing and branding of environmental practices. Certification also highlights the importance of independent auditing of the environmental performance of the company. Certification procedures include quantified and qualitative evaluation of environmental performance, and contain tools to measure continual improvements over time.

Environmental tasks require a varied mix of internal capacity and competence as well as use of external service providers to advise, organize and implement and audit projects. This need for external service providers makes it relevant to investigate the location and geographical distribution of these consultants. A lower level of environmental competence, priorities and training can explain why some companies are less likely to focus on these issues. Large visible businesses may, on the other hand, include environmental information in their annual reports in order to legitimate their operations. However, Schaper (2002) finds no evidence that smaller companies are less environmentally responsible. On the contrary, a smaller organization will often mean higher flexibility. To claim that quality of performance is related to size seems to be an oversimplification. Instead, performance may be determined by a complex combination of regulation, structural characteristics and competitive position that varies by industry and across individual firms.

Proactive approaches to attaining a green certificate may also engender a position of influence in terms of government policy making. In fact, being a forerunner and best practice performer represents a competitive position and indicates readiness for future regulations. Some firms may also change their strategy from one that gives them the right to operate by following rules and regulations to one that involves more actively branding their eco-performance, or even becoming more efficient by using or producing more environmentally friendly technology. A green certificate may be integrated as an active component of a company’s branding. Management systems, communicated through an environmental certification scheme, are a framework that may increase awareness, target action and boost performance. Annual revisions will present important benchmarks that form the basis for future improvements.

Advertising a green image through certification may be one thing, but how such programmes actually affect company performance is another issue. Some researchers claim that green certification projects are merely a form of greenwashing rather than clearly making production activities more environmentally friendly (Boiral 2007). Bartolomeo et al. (2007) discuss the importance of distinguishing between company types and products when discussing environmental impact. In this respect, Gray (2010) questions whether accounting for sustainability actually benefits the environment or whether it is simply used to improve the public image of the company.

One response to these concerns is suggested by Comoglio and Botta (2012) who adopt a focus on the way environmental management systems (EMSs) have contributed to an increased commitment to environmentally oriented performance. This includes important methodological questions related to the fact that the EMS programme requires data from the certificated projects to be made available to the public. The accuracy of the definitions of indicators across projects and the ability to compare performance across enterprises are also addressed in their paper. However, Gouldson and Sullivan (2007) question the value of corporate reports as an information source regarding environmental performance. Another issue they address is therefore the role of public authorities in ensuring standardization of certain performance measures. Boiral (2007) discusses the symbolic value of certification and the fact that the reporting procedures are legitimate and recognized, and is critical of the way in which these standards were loosely coupled to environmental improvements linked to daily operations. There is also a risk that some standardized indicators will be given priority over others (Potoski and Prakash 2013).

Finally, Ball et al. (2000) question the value of some stages of the environmental auditing process, in particular third-party verification. Report engagements mainly involve chartered accountants and environmental auditors, and Ball et al.’s article questions the independence of advice linked to these associates. Their conclusion is that these ‘externals’ fear losing business and therefore they may be reluctant to make too many critical comments concerning the quality of their client’s environmental performance. Furthermore, the fact that it is common to occasionally change the verifier limits the ability of externals to comment on whether a company is progressing over time. None of these articles has questioned the independence of the various certification systems, an aspect I will return to shortly.

3 The Certification Industry: A Conceptual and Structural Approach

Some types of certification bodies are operating worldwide, while others are dedicated to a certain region on either an international or a national scale. Yet others operate in certain industries. Some certificates are focused only on environmental issues, while in others environmental factors are one of several topics. A certification scheme may include public lists of certificate holders or listings only available to clients. Further details regarding these characteristics will be presented later in the chapter.

The research presented in this chapter focuses on environmental management certifications, five of which are listed in Table 3.1. The first three, namely ISO, EMAS and Eco-Lighthouse, are described and analysed in further detail in this study. These are certification schemes with an open listing of memberships. ISO and Eco-Lighthouse are the two largest programmes in terms of number of certificates in the Norwegian market. The large market share of these programmes means that they have less value as an exclusive club privilege. These certificates can be considered standard certifications. They are also general in the sense that they are held by companies operating in many different sectors. Table 3.1 also includes other certification programmes that are of particular importance for Norway, including those for the large industries such as oil and gas and salmon fish farming. A common certificate within the oil and gas sector is the certification system Achilles, which is a supply chain management system that ensures high-quality information and quality criteria systems for businesses in relation to their clients. Achilles started in Norway in 1991 (located in Oslo and the Stavanger area) targeting procurement management within the oil and gas industry, and at present covers 900 companies worldwide in various sectors including a range of companies in the energy sector, car industry and building and construction (www.achilles.com, accessed 16 June 2015). Pre-screening and monitoring through this certification programme helps companies to manage and mitigate risk and streamline their procurement strategies. It is a management tool that checks the qualifications and performance of potential and existing suppliers in order to establish standards regarding a range of elements including financial issues as well as quality measures regarding sustainability, environmental performance and ethics. According to information obtained from the Achilles web site, this scheme is a way to help buyers protect their brand reputation and avoid disruptions by identifying and managing information across all tiers of the supply chain (www.achilles.com, accessed 2 June 2015). This is a commercial service in which the list of suppliers is only visible to the buyers. In Norway, Achilles is a certificate for the players in the oil and gas industry as well as some parts of the building and construction industry. Statoil, a major industrial actor in the Norwegian petroleum sector, is part of this programme and requires this certificate from all of its suppliers. Regarding the environment, this form of certificate is actually driven by the standard required by demanding clients. With reference to the discussion in the preceding section, this form of exclusivity among members is what Potoski and Prakash (2005) describe as a club good, which for this certificate can be defined as a supply chain certificate scheme. It should also be mentioned that this is the only pure commercial certification scheme of the five in Table 3.1, whereas the others define themselves as schemes related to non-governmental membership.

Table 3.1 Examples of voluntary certificate schemes relevant for businesses and organizations in Norway

Yet a different category of certificates, as shown in Table 3.1, relating to the development of a standard value chain approach, includes cases where players in an industrial sector aim to build a common practice concerning environmental responsibility. This form of certificate is important for the fish-farmed salmon industry in which consumers rather than individual producers associate themselves with the product that they have in common. This industry has faced several problems over the years regarding negative environmental effects including diseases and lice infections that represent a threat to the wild salmon. These challenges and possible problems regarding quality have to be solved for the sake of the environment as well as the reputation of the market. The recent strategy of becoming a member of the Aquaculture Stewardship Council (ASC) certification programme (www-asc.acqua.org, accessed 2 June 2015) and adopting their labelling aims to contribute to transforming the seafood markets towards sustainability. It can therefore be seen as a collective licence to operate action. It should also be noted that ASC, which was established in 2010, is organized by the World Wildlife Fund (the Norway office is in Oslo). It also represents a label that, for consumers, aims to promote the best environmental and social choices when buying seafood. It is an open-listed certification scheme.

Open lists are also the case for ISO, EMAS and Eco-Lighthouse. The EU’s certification tool EMAS is a management tool that companies and other organizations can use for evaluating, reporting and improving their environmental performance. The scheme has been available for voluntary participation by companies since 1995 and was originally restricted to industrial companies, but is now also open to other sectors. EMAS is managed by Norwegian Accreditation (NA). Accredited environmental verifiers approve an organization’s environmental statement and verify that the organization meets all the requirements detailed under the regulations. The organizations that are issuing this certificate are given the right to use the EMAS logo and are registered in a national EMAS register managed by the Brønnøysund Registration Centre. This information is also published in the EU register for EMAS and is checked by suppliers and other business partners (www.akkreditert.no, accessed 2 June 2015; and interview data).

The ISO developed the environmental standard ISO 14001, which was launched after calls for such certification at the United Nation’s Conference on Environment and Development (UNCED) in Rio in 1992. ISO 14001 was developed in 1996 and is well recognized among businesses (Bansal and Bogner 2002). The ISO 14001 was adjusted in 2000 and 2004 (To and Lee 2014), and a new version with several new elements was published in October 2015. Major changes include improvements regarding environmental performance indicators, focus on environmental resource use, climate change mitigation and life-cycle thinking. An addition that should be mentioned is a communication strategy (www.iso.org accessed 9 June 2015; and interview data). EMAS and ISO 14001, which were quite similar in earlier versions, were competitive standards when first introduced. More recently, ISO 14001, with more than 300,000 certificate holders compared to EMAS with 4,500 holders, has become the far more important of the two (iso.org, emas.org). This is not least because ISO with its worldwide country memberships has a broader geographical range compared to EMAS, which focuses on EU/EEA countries. It is also a clear advantage for ISO 14001 that users can combine this certificate with a whole range of other ISO standards.

The third certification programme included in this study is the Eco-Lighthouse (www.miljofyrtarn.no, accessed 2 June 2015) scheme that started as a follow-up project in Kristiansand (a larger city in Southern Norway) after the UNCED in 1992. Eco-Lighthouse eventually changed its status from a project to a foundation in 2003 and became Norway’s most widespread form of environmental certification targeting both the public and commercial sectors. Behind this scheme are central organizations in the Norwegian government and the business community. The scheme requires enterprises and other holders of the certificate to employ an internal environmental officer who has the responsibility of maintaining the environmental efforts and implementing new measures. The programme focuses on internal control measurements, HES (health, environment and safety) issues, work conditions, procurement of material inputs (choosing eco-labelled products and services whenever possible), energy consumption, waste and pollution management, transport and climate accounts. Members of the scheme submit an annual report to the foundation. They are also required to ensure that the annual report is distributed to their employees.

The Eco-Lighthouse Foundation has engaged trained and accredited internal and external consultants that help the commercial enterprises and other private and public organizations to identify their needs and strategies as well as deal with issues linked to implementation and reporting. The certification standard is based on verification by an independent third party (the assessor). The consultant and assessors are, on the basis of training, personally appointed as certifiers by the Eco-Lighthouse Foundation.

Figure 3.1 illustrates the certification production system operating on different geographical scales and with different forms of organizations, which I now explain in further detail. The certification service industry consists of some international standardization bodies operating worldwide (e.g., ISO), whereas others are focused on a certain region (e.g., EMAS in Europe) or at the national level (e.g., Eco-Lighthouse in Norway). This section of the production system is illustrated on the left side of the model. Each member country has a national member who is engaged in efforts to develop quality and conformity to standards on an international scale through working groups and board representations. These national organizations are also the leading players in the formulation, management and sale of standards, operating as a neutral link between stakeholders. The national unit is supported by a panel of experts from the industry and other parts of the business community, R&D enterprises and the public sector. Consultants plan and implement certification schemes for their clients. These experts can be either in-house or external, depending on the type of programme. A certificate will be issued on the basis of authorized testing and reporting procedures.

Fig. 3.1

The “production system” of the environmental certification industry

The certification service industry consists of both commercial stakeholders and public or private non-profit operators. The fact that the certification process is a form of audit that will always require an independent third party further indicates the need for external expertise. A public accreditation institution at the top of an organizational hierarchy aims to ensure that certification bodies achieve technical competence, integrity and conformity in a way that meets the public’s requirements. Accreditation expertise aims to ensure that the independent assessment of accredited organizations results in technical competence, integrity and conformity. Accreditation is not compulsory and non-accreditation does not necessarily mean that organizations are not reputable. However, accreditation does provide independent confirmation of competence. Accreditation organizations ensure the provision of reliable test results and certifiers that are internationally accepted through co-operation between accreditation bodies in regional and worldwide organizations. NA is an independent state-owned organization that participates in the European Co-operation for Accreditation (EA) and the International Accreditation Forum (IAF). These organizations maintain a mutual acceptance of common criteria of accredited services. The certification authorities for Eco-Lighthouse, which is a domestic certificate, are the municipality or county of the applicant. These municipalities may either have their own certification service or outsource this task to approved private certifiers.

Some certification programmes include public lists of certificate holders, although in other programmes this information is only available to clients. The listing system for EMAS is organized through the official public sector register Brønnøysundregistrene in Norway. Eco-Lighthouse publishes lists of certifiers and clients on their web site. An external certification listing service for ISO is provided by a private company dedicated to this task. A further component of the certification process is the environmental auditors that annually evaluate and control the environmental performance of firms. For ISO, the auditing process is based on the particular characteristics and aims of particular tasks identified by the client firm. The results of the auditing process, which are quite detailed, are reported internally. Eco-Lighthouse has a more standardized reporting template including some industry-specific indicators. Their programme requires certificate holders to submit an annual environmental report describing their achievements and action plan to the foundation. Details in a complete report will, according to information from the Eco-Lighthouse web site (www.miljofyrtarn.no, accessed 2 April 2015), meet the accounting law requirements regarding information about environmental impact. The final type of service provider in the certification industry, which may service clients or other stakeholders, is the environmental legal consultants. The role of these experts is to anticipate and control environmental risks and to take action in the case of disputes.

4 The Structural Characteristics and Geographical Distribution of the Eco-Certification Industry in Norway

Environmental considerations across industries in both the private and public sectors have provided an opening for service providers supporting the planning, documentation, implementation, evaluation and certification of environmental management projects as well as advising businesses on environmental performance. A certification standard is based on verification by an independent third party, either an organization or an individual consultant.

4.1 The Certification Market for Norway

The empirical analysis in this study based on open-source registers in Norway has focused on the two most commonly used international certification schemes for organizations. These are the international systems EMAS and ISO 14001, in addition to the most common national scheme, Eco-Lighthouse. Data on the number of firms registered under these three certification programmes, sorted by location and industrial sector according to their status in January 2012, are presented in Table 3.2. The figures show that ISO 14001 and Eco-Lighthouse had 865 and 3,629 registrations, respectively. Also according to the figures in Table 3.2, there are only 21 organizations (all enterprises) in Norway registered in EMAS, compared with around 100 a few years ago. In 2015, there were only nine EMAS-certified companies, three in the waste collection industry, two in chemical products, one in iron and steel production, one in plaster production and two in fuel retail (according to the listing in www.brreg.no, accessed 2 June 2015). It should also be noted that six of these nine companies are also holders of ISO 14001 (data based on listings in www.kvalex.no). A closer inspection of these projects showed that the certifiers were also accredited certifiers for ISO.

Table 3.2 Eco-certification holders among enterprises in Norway by region, 2012

The capital of Norway, Oslo, and the rest of Eastern and Southern Norway (the region where Eco-Lighthouse originated) are the most important regions in terms of total share of certification schemes. We find a similar geographic pattern for Eco-Lighthouse certifications (Table 3.2), whereas Western Norway has the strongest relative share of ISO certificate holders. Western Norway’s ISO position can be explained by its strong share of companies within major sectors such as petroleum, maritime, marine resources and metallurgical industries. These sectors are therefore of extent users of Eco-Lighthouse. Western Norway has the strongest position in the ISO 14001 standard both measured in absolute figures and relative share compared with population size. Trøndelag, with many international technology-oriented businesses, is also an important ISO region. (The figures for EMAS are too small to be of any value for this geographical analysis).

The Eco-Lighthouse certification system is the most common of these three schemes and targets SMEs (small and medium-sized enterprises). Here, I present Eco-Lighthouse’s sectorial and geographical market coverage in more detail. In what kind of sectors do we find the clients and what characterizes the geographical distribution of its certification? Are clients mainly located in urban areas, or do they also operate in rural parts of Norway? And do we actually find specific areas of the country with hardly any certificates at all?

Table 3.3 shows that certificate holders for Eco-Lighthouse are well distributed geographically. The 3,629 certificates were held by organizations based in 59 % (254) of all municipalities, 428 in Norway. Oslo, with only one municipality, together with Hedmark, Buskerud and Vestfold, were the four counties with highest coverage by number of municipalities with registered certificate holders. The poorest coverage related to share of municipalities is found in Nordland, Møre og Romsdal, Hordaland and Nord-Trøndelag. The question is whether those areas without registration are mostly rural.

Table 3.3 Eco-Lighthouse certificate

Regarding the 174 ‘white spots’ (i.e., the municipalities that held no Eco-Lighthouse certificates), a closer investigation shows that 26 had companies that held ISO 14001 certificates. These municipalities were removed from the list. None of the remaining municipalities held EMAS registrations. The remaining list of 148 municipalities was sorted according to centrality, which is the geographic location of a municipality in relation to urban settlements of various sizes. The urban settlements are, according to Statistics Norway (www.ssb.no), divided into three levels according to population and available public services. Urban settlements at Level 3 are regional centres (population of at least 50,000), Level 2 settlements have a population of between 15,000 and 50,000, and Level 1 settlements have a population of between 5,000 and 15,000. Not surprisingly, this analysis showed that 75 % of the municipalities without registrations of certificate holders were rural. A closer inspection showed that these are mainly municipalities dominated by agriculture, fisheries and forestry and public sector jobs. The more urban municipalities on this list without any certificates are generally suburban living settlements without any strong industrial structure.

The analysis of the industrial structure of the market for the different certificates shows some variation. The service sector, retail, health care and education are the four most important client categories for Eco-Lighthouse. This means that Eco-Lighthouse has a weaker position among enterprises engaged in manufacturing production than ISO and EMAS. Among manufacturing production firms that are certified, ISO 14001 certification is much more common, not least because this is an internationally accepted certificate and a familiar standard to many firms that are already part of other ISO certification systems. This pattern of a low level of Eco-Lighthouse certificates among manufacturing firms can also be explained by the fact that many companies deliver goods and services to the petroleum sector, which accounts for a considerable share of business in Norway. As previously mentioned, Statoil, a major company within the petroleum sector in Norway, does require Achilles certification for its business partners. Several of these companies will also be covered by ISO 14001 and other ISO certificates, but because of export orientation hardly any of them are holders of Eco-Lighthouse certification. The certificates are in other words also clearly divided regarding geographical distribution.

4.2 The Certification Service Providers

The service providers are concentrated in the ISO 14001 market in Norway, with four providers servicing 91 % of the clients, while the remaining part of the market is covered by two other smaller companies. These first four companies are all located in the capital, but also have operations elsewhere in the country. The two other companies have their headquarters in Sandefjord in the south-east of Norway and Stavanger i Western Norway. The location pattern for these consultants and certifiers has however, less practical implications for visited clients, which as part of the project service are visited onsite. As the data already have shown, EMAS has only a few remaining clients left. It is also interesting to see that two of the three EMAS service operators do also cover ISO 14001.

Eco-Lighthouse has a somewhat different organizational and geographical structure. The Eco-Lighthouse Foundation has identified, engaged, trained and accredited internal and external consultants who help commercial enterprises and other private and public organizations to identify their needs and strategies as well as deal with issues linked to implementation and reporting. Larger organizations have the ability to train an internal member of their staff to undertake an environmental analysis and develop and implement strategies in accordance with the requirements of the specific industry. This accreditation is individualized and requires the consultant to complete an environmental analysis within a period of 2 years, otherwise the course must be repeated. When the necessary environmental measures have been implemented in the organization, an independent assessor approves the certificate and issues an Eco-Lighthouse diploma. The clients are required to renew their certificates every 3 years.

Table 3.4 Organizational status and geography among Eco-Lighthouse consultants

The final section of this analysis examines the Eco-Lighthouse consultants in further detail. Of the 202 Eco-Lighthouse consultants, 60 % were located in large urban municipalities, 19 % in other urban municipalities and 21 % in rural municipalities. I also examined organizational status and found that 44 % were sole practitioners, with some likely working on a full-time basis and others working on a part-time basis. The rest of these service providers were either single-location companies with employees (38 %) or multisite location companies, but still SMEs (i.e., less than 250 employees). This structural analysis shows that the number of service providers for Eco-Lighthouse is much larger and more geographically distributed than ISO and EMAS providers. The service operators for the latter two certification schemes are much more concentrated regarding both numbers and location.

My findings regarding business service consultants within Eco-Lighthouse showed that many were running their own firm or working in a small firm with none or too few employees to keep updated and expand their knowledge within this field. Furthermore, the fact that around 10 % of listed consultants in 2012 had later ceased their business operations (some because of bankruptcy) indicates the vulnerability of this sector to overall business conditions. This vulnerability does not seem to be an issue for ISO and EMAS, which are served by larger and more stable service operators.

5 Conclusion

On the client side, certifications of products can be self-initiated as a way of greening the brand and thus leading to new business opportunities. The evaluation and documentation of environmental schemes gives organizations a detailed overview of their resource management that may lead to performance improvements. Certification may also place businesses in a stronger position in relation to investors seeking to reduce their financial risk from, for example, pollution damage or halted production in cases where legislated environmental standards are not met.

Proactive enterprises can use sustainable development strategies to strengthen their position in existing markets or even create new business opportunities. The adoption of certification standards represents both an internal management tool and a way of promoting external recognition by regulatory authorities, business partners and customers. The standards specify requirements that enable an organization to develop and implement policies and objectives that take into account legal and other requirements in relation to significant environmental issues that the organization has identified as being important to them.

This study investigated the access, demand and role of business services and markets linked to green accounting and certification in Norway. The market for this form of service includes commercial businesses, public organizations and NGOs. I have approached this study from a perspective that incorporates the territorial dimension to identify where these forms of expertise are located. I have also presented data that identifies the location and characteristic of business clients. My geographical study of certification programmes has shown participation across most of Norway. Eco-Lighthouse seems to be playing an important role in addition to the more established programme ISO 14001, while EMAS seems to have outlived its role in the market.

This part of the service industry is not as geographically concentrated or urbanized as one might expect, which likely can be explained by the specific regional specialized industrial structure based on natural resources with petroleum, marine and energy resources that characterizes the industrial structure of Norway. Concentration indicates that these experts are well recognized in their market. The fact that they serve different categories of business that are not competitors makes it also possible to pass over best practice knowledge examples to new clients.

Environmental certificate projects are no doubt an interesting and quite welcome field of business in the service sector. The data has shown the way this form of expertise represents business opportunities outside the larger urban areas. The existence of these projects in less central areas means that this form of knowledge is accessible for most businesses regardless of location. However, it is appropriate to raise some questions about environmental certificates. In particular, one may question the competence of both managers and service suppliers regarding knowledge concerning the environment. This is a timely question since this field is quite dynamic and complex even for those who study it. Additionally, I find it relevant to question the stability and capacity of some of the smaller business service providers operating in this field.

Certificates that are well distributed geographically and in large numbers are a sign of a system that has a high degree of acceptance. However, this loss of exclusivity does suggest lower brand value. This study therefore has identified different strategies to overcome this paradox. One solution found among some of the certificate holders is to use combinations of certificates. This can, for example, be a combination of ISO certificates covering different aspects of production systems, or it may also be a portfolio of certificates covering different performance levels, aspects of the production system or geographical markets. For example, as mentioned earlier, a majority of the few remaining EMAS certificate holders in Norway are also part of the ISO 14001 scheme. Also, Eco-Lighthouse certificate holders are advised to apply for an ISO 14001 certificate when moving into export markets. The option to obtain a higher certification status also involves the option of acquiring a more niche market certificate. This has recently been the case for the fish farming industry in Norway where the major global players in salmon aquaculture have joined forces to certify their businesses under the ASC Trademark for Responsibly Farmed Fish.

Some companies may be less focused on environmental issues for various reasons, such as limited reactive capacity within the organization to adopt strategies to meet these kinds of challenges or limited financial resources. Furthermore, a lower level of environmental competence, priorities and training are additional reasons why performance among many smaller companies is less likely to focus on these issues. The fact that larger companies are more closely scrutinized regarding their behaviour is another possible explanation for differences in environmental strategies. The advantage of smaller companies is their ability to easily adjust, due to their small size, their business to improve their environmental standards.

The level of environmental performance verified by certification is a stamp of approval that, for some industries, becomes the norm. It may be part of a strategy of being politically correct in all respects and part of the corporate social responsibility strategy, but it may also be necessary in order to operate in an efficient and convincing way that meets the expectations of both the market and the authorities. On the other hand, there are also those companies that obtain a first-mover advantage, achieving the distinction of being one of the few that are certified within a specific market. This helps to enhance the company’s image, and those who are certified may also exert pressure on their business partners to do the same. Companies that are a part of the Achilles network illustrates this point.

This study does not systematically analyse the environmental effects of certifications and I am not aware of any other study that has. The reason for this gap in the literature may partly be due to the fact that environmental performance is much more complex than what can be monitor with numerical measures. Giving advice that leads to substantial improvements will require a move beyond these standardized procedures to a process that is more closely linked to specific business strategies. One may also find more substantial effects if quantitative measures are linked to the engineering and implementation of technological innovations. Companies can still, through their environmental performance, play an important role in leading society in a more sustainable direction by setting a greener standard than that usually found in the market.

My case interview with one of the larger service suppliers within the certification industry in Norway highlighted two particular points that can affect the level of environmental performance. First, it is important to note that it is the company itself that sets the initial baseline for performance, and it is measured against this status from one year to the next. Second, there are few systematic reports of the environmental outcomes of implementing these management systems. The reason for this is that such measurements would be quite costly to implement and they are not a priority for a certification system that has a high standard and is easy to sell. Looking into the customer lists available online from some of the larger players within the ISO certification system shows that a large majority have several different certificates covering other aspects of their businesses. The fact that companies differ substantially in terms of characteristics of their organization and production systems, markets and regulatory frameworks makes it difficult to develop detailed environmental requirements in a certification programme. This means that the goals and content of management systems must be individually designed. Much of the value of certification projects may be mostly of a qualitative kind. Not least, it may be about developing awareness that triggers best practice competition and environmental positive actions in the long run.

Finally, the findings of this study highlight the benefit of a geographical service-led perspective in understanding the certification industry in Norway. This service activity is unevenly distributed across the Norwegian economy and its development has been highly sensitive to regional variations in the nature of demand and client firm needs despite sharing a common national context.