1

Copyright 2007. No quotation or citation without attribution.

Environmentally-friendly
Automobiles
An Analysis of ISO Accreditation of Honda Motors

By: Namin Peng
GRADUATE SCHOOL OF INTERNATIONAL RELATIONS AND PACIFIC STUDIESUNIVERSITY OF CALIFORNIA, SAN DIEGO
Prepared for Professor Peter Gourevitch
Edited by Jennifer Cheng
Corporate Social Responsibility
Fall 2007
IR/PS CSR Case #07-21

Abstract:
World-wide concern about the Green House effect, environmental pollution, and global warming has led tothe development of a series of standards and campaigns in the automobile industry, which is considered to
be a major contributor to these problems. International Organization for Standardization (ISO), the world's
largest developer and publisher of international industrial and commercial standards, is committed todeveloping standards that is aimed at the increasing the attention the automobile manufacturers and theconsumers pay to the environment when they make or buy the automobiles. In 1996, the International
Standards Organization launched a product called ISO 14001 which outlined a standardized environmental
management system that could be applied in any industry and in any location. ISO certification is based ona set of established principles and criteria. Certified automobiles have the right to use the ISO 14001
standards, which help auto makers minimize how their operations or products negatively affect theenvironment (cause adverse changes to air, water, or land), comply with applicable laws, regulations, andother environmentally oriented requirements, and continually improve on the above. ISO 14001
Certification is performed by third-party organizations rather than by ISO directly. This report firstprovides a brief background on the automobile industry and environmental pollution campaigns before
investigating ISO’s organizational structure, certification process, and monitoring tools. Relevant casestudy of Honda Motors will be applied in support of credibility arguments, but shortfalls of the organizationand certification will also be addressed.

2

Copyright 2007. No quotation or citation without attribution.

Table of Contents
I. Background.......................................................................................................................3
II. Awareness Campaigns ....................................................................................................3
III. International Organization of Standardization (ISO): Identity and Structure...........5
A. About ISO...................................................................................................................5
B. Governance and Operations.......................................................................................5
IV. ISO 14001 Goals and Standards Development Process ................................................8
A. ISO 14001 and CSR Goals .........................................................................................8
B. The Stakeholders in International Standardization .....................................................8
C. Development of International Standards ....................................................................9
D. Standards Driven by the Market...............................................................................11
V. Honda and Its Environmental Policy............................................................................12
A. Overview..................................................................................................................12
B. Green Purchasing ....................................................................................................13
C. Green Dealers..........................................................................................................14
VI. Certification Process of Honda....................................................................................14
A. ISO 14001 Certification of Honda includes five phases: ...........................................14
B. ISO 14001 Internal Auditor Training........................................................................15
VII. External Evaluation & Monitoring............................................................................16
VIII. Critiques of ISO ........................................................................................................17
A. Financial Sources.....................................................................................................17
B. Problems with Monitoring........................................................................................18
C. Conflict of interest in case of Violations ...................................................................18
D. Lack of Employee Awareness and Publicity .............................................................19
E. The real benefits of ISO 14001 are questionable.......................................................19
IX. Suggestions ...................................................................................................................20
X. Suggested Items for Further Research .........................................................................21
XI. Discussion Questions....................................................................................................22
XII. References ...................................................................................................................23

3

Copyright 2007. No quotation or citation without attribution.
I. BackgroundIn the 21st Century, automobile industry is expanding exponentially as a result of global
economic development, which has also caused serious environmental pollution. Pollutants
derived from automobile operation have begun to pose environmental problems ofconsiderable magnitude. About 70% of the carbon monoxide, 45% of the nitrogen oxides, and
34% of the hydrocarbon pollution in the world can be traced directly to automobile exhausts.
In addition, rubber (which wears away from tires), motor oil, brake fluid, and other substances
accumulate on roadways and are washed into streams, with effects nearly as serious as thoseof untreated sewage. A problem also exists in disposing of the automobiles themselves when
they are no longer operable. These are the major corporate social responsibility problems in
the industry. Many activists and NGOs have initiated campaigns to raise the awareness of the
problem, pressure the automobile makers and make world-wide standards of environmental
management and testing. To reduce pollution and protect the environment, the automobile
industry needs standardization. The paper informs the readers of the processes and proceduresof ISO 14001 standard development in the International Organization for Standardization, theworld's largest developer and publisher of international industrial and commercial standards.
The paper will look at the environmental management system and the accreditation process ofthe Honda Motors. The main goal is to find out how ISO standards are applied and how they
monitor auto makers. The paper will also question the certification and monitoring process togive advice to the other NGOs on how to create an effective organizational structure andprocess to make standards, how to monitor their compliance, and finally, if violation occurs,
how to punish the violators.
II. Awareness Campaigns
Due largely to the failure of regulation by conventional politics to reverse the pollution
caused by the automobile industry, market based strategies have gained momentum. The
strategy is to increase awareness of Green House effect and pollution of the automobiles.

4

Copyright 2007. No quotation or citation without attribution.
Many environmental campaigns have gained momentums in the recent years. As thequality and quantity of incentives has matured, so too has the number of companies who arelooking to capitalize in the new industry. This industry wide growth prompted the need for anindustry wide standard that encompassed just what it meant to be environmentally friendly.
For example, the Clean Car Campaign is a national campaign coordinated by state,regional and national environmental organizations promoting a clean revolution in the motor
vehicle industry. In particular, the campaign seeks to promote the development and sale ofadvanced technology vehicles that meet a high standard of environmental performance.
A key component of the campaign is to encourage the purchase of cleaner vehicles by
consumers and fleet buyers. The campaign's "Clean Car Pledge" involves the collection ofpledges from thousands of potential consumers indicating their interest in purchasing vehicles
meeting the campaign's Clean Car Standard. These pledges will be used to demonstrate public
support for cleaner vehicle choices. The campaign will also serve as an advocate for public
policies to motivate automakers such as Honda Motors to invest in cleaner vehicle designs
and manufacturing practices, including incentives that encourage consumers to "buy green."
The Clean Car Standard was developed by the campaign as a practical, short-term
performance-based standard achievable by automakers. The standard promotes increased fuelefficiency, reduced tailpipe emissions and clean production practices. Meeting this standard
compliments other important values of practicality, affordability and safety.
The Campaign is coordinated by a unique coalition of national, state and regionalorganizations, including: American Council for an Energy Efficient Economy, Ecology
Center, Environmental Defense, Great Lakes United, Michigan Environmental Council andUnion of Concerned Scientists. Consumers Union (CU) and other consumer andenvironmental groups have had a longstanding public concern about the national need torequire better vehicle fuel economy across the fleet of passenger vehicles.

5

Copyright 2007. No quotation or citation without attribution.
III. International Organization of Standardization (ISO): Identity and Structure
A. About ISO
ISO (International Organization for Standardization) is the world's largest developer andpublisher of International Standards. ISO is a network of the national standards institutes of
157 countries, one member per country, with a Central Secretariat in Geneva, Switzerland. It
is a non-governmental organization that forms a bridge between the public and private sectors.
On the one hand, many of its member institutes are part of the government, or are mandated
by their government. On the other hand, other members have their roots uniquely in theprivate sector, set up by national partnerships of industry associations. Therefore, ISO enables
a consensus to be reached on solutions that meet both the requirements of business and thebroader needs of society. ISO forms a bridge between the public and private sectors.

B. Governance and Operations
ISO’s orientation is guided by a Strategic Plan approved for a five-year period by the ISO
members. The ISO members, ultimate representatives of ISO for their own countries, aredivided in three categories: member bodies (full members), correspondent members andsubscriber members.
A member body of ISO is the national body "most representative of standardization in its
country". Only one such body for each country is accepted for membership of ISO. Member
bodies are entitled to participate and exercise full voting rights on any technical committee
and policy committee of ISO.
A correspondent member is usually an organization in a country which does not yet havea fully-developed national standards activity. Correspondent members do not take an active
part in the technical and policy development work, but are entitled to be kept fully informed
about the work of interest to them.
Subscriber membership has been established for countries with very small economies.
Subscriber members pay reduced membership fees that nevertheless allow them to maintaincontact with international standardization.

6

Copyright 2007. No quotation or citation without attribution.
The General Assembly, which meets annually, consists of a meeting of the Principal
Officers of ISO and delegates nominated by the member bodies. Correspondent members andsubscriber members may attend as observers. The Principal Officers include the President
who is a prominent figure in standardization or in business, the Vice President (policy), theVice President (technical management), the Treasurer, and the Secretary-General. The
General Assembly’s agenda includes, inter alia, actions related to the ISO annual report, theStrategic Plan with financial implications, and the Treasurer’s annual financial status reporton the ISO Central Secretariat.
The ISO Statutes stipulate that, while the General Assembly is the ultimate authority of
the Organization, most of the governance functions of ISO are performed by the Council inaccordance with the policy laid down by the member bodies. The Council meets twice a year
and its membership is rotated to ensure that it is representative of ISO's membership. All
member bodies are eligible for appointment/election to the Council. Under the Council, there
are a number of policy development committees to provide strategic guidance for the
standards’ development work on cross-sectoral aspects. They are: CASCO (conformity
assessment); COPOLCO (consumer policy), and DEVCO (developing country matters). The
policy development committees are open to all member bodies and correspondent members.
The Technical Management Board (TMB) reports to Council, and is itself responsible forthe overall management of the technical work, including for a number of strategic andtechnical advisory groups. Member bodies are eligible for appointment/election to the TMB
in accordance with a set of criteria established by the Council.
Operations are managed by the Secretary-General (chief executive officer) who reports to
the Council. The Secretary-General is based at the ISO Central Secretariat in Geneva(Switzerland) with a compact staff which provides administrative and technical support to the
ISO members, coordinates the decentralized standards' development program, and publishes
the output. The ISO Central Secretariat also acts as the secretariat of the governing bodies,policy development committees and their subsidiary bodies.

7

Copyright 2007. No quotation or citation without attribution.
However, the ISO is actually not purely an NGO, since its membership is by nation, andeach nation is represented by what the ISO Council determines to be the 'most broadly
representative' standardization body of a nation. That body might itself be a nongovernmentalorganization; for example, the United States is represented in ISO by the American National
Standards Institute, which is independent of the federal government. However, other countries
can be represented by national governmental agencies; this is the trend in Europe.
The ISO has the professional member base that is willing to pay them thousands ofdollars annually and the consensus voting system that is viewed as fair and democratic.
Members are able to vote on the development of standards.
Another integral element to the structural foundation of the ISO is its commitment toremain entirely independent. ISO does not allow corporations to serve on its governing board.

ISO's organizational structure

8

Copyright 2007. No quotation or citation without attribution.
IV. ISO 14001 Goals and Standards Development Process
A. ISO 14001 and CSR Goals
What is ISO 14001?
ISO 14001 is a series of internationally accepted standards for Environmental
Management Systems(EMS), which includes organizational structure, planning activities,
responsibilities, practices, procedures, processes and resources for developing, implementing,achieving, reviewing and maintaining the environmental policy. ISO14000 elevates
Environmental Management to a Strategic Level that can be applied to any organization, fromany industry, anywhere in the world.

CSR goals
ISO 14001 enables an organization (in this case, Honda Motors) to develop andimplement a policy to minimize pollution, understand the impacts of its activities on theenvironment, comply with legal requirements, and continuously improve its Environmental
Management System. These processes are to be based on the Plan-Do-Check-Act cycle.

B. The Stakeholders in International Standardization
The stakeholders include all those groups who have different incentives in settinginternational standards because they are affected by them or contribute to the development
process. Stakeholders participate in the technical work of ISO through national delegations
appointed by the member bodies of ISO or, if they are organized in international or
broadly-based organizations, through liaison organizations. National delegations are normallycomposed of a mix of the stakeholder groups listed below and represent national positions.

The following main groups of stakeholders can be discerned. When we decide whether an
ISO certificate is credible, we should be able to find out the incentives of different parties.

9

Copyright 2007. No quotation or citation without attribution.
Stakeholders

Incentives to comply

Incentives not to comply

Automobile Makers

Improve PR, reputation and EMS

Reduce costs

Industry Associations

Improve reputation

Appease the members

Consumers

Pursue a healthy life; Get praise;

Buy cheaper products

Religious belief
Governments

Provide public goods to win more

Get more tax revenue or bribes

local voters
Certifiers

Improve reputation; Improve

Get more dues or bribes

environment
Consulting firms

Improve reputation, long-term

Get more fees for consulting

development of business

C. Development of International Standards
International Standards are developed by ISO technical committees (TC) andsubcommittees (SC) by a six-step process:Stage 1: Proposal stage
The need for a standard is usually expressed by an industry sector, which communicatesthis need to a national member body. The latter proposes the new work item to ISO. The next
step is to confirm that a particular international standard is needed. A new proposal issubmitted for vote by the members of the relevant TC or SC to determine the inclusion of thework item in the program of work.
The proposal is accepted if a majority of the members of the TC/SC votes in favor and if
at least five members declare their commitment to participate actively in the project. Then,definition of the technical scope of the future standard is given and a project leader
responsible for the work item is normally appointed.

Stage 2: Preparatory stage

10

Copyright 2007. No quotation or citation without attribution.
Once the need for an International Standard has been recognized and formally agreed, aworking group of experts, the chairman (convener) of which is the project leader, is set up by
the TC/SC for the preparation of a working draft. It comprises technical experts fromcountries interested in the subject matter. Successive working drafts may be considered until
the working group is satisfied that it has developed the best technical solution to the problem
being addressed. At this stage, the draft is forwarded to the working group's parent committee
for the consensus-building phase.

Stage 3: Committee stage
As soon as a first committee draft is available, it is registered by the ISO Central
Secretariat. It is distributed for comment and, if required, voting, by the Members of the
TC/SC. Successive committee drafts may be considered until consensus is reached on thetechnical content. Once consensus has been attained, the text is finalized for submission as a
Draft International Standard (DIS).

Stage 4: Enquiry stage
The Draft International Standard (DIS) is circulated to all ISO member bodies by the ISO
Central Secretariat for voting within a period of five months. This is a consensus-building
phase during which member countries can negotiate the detailed specifications within thestandard. It is approved for submission as a final draft International Standard (FDIS) if a
two-thirds majority of the Members of the TC/SC are in favor and not more than one-quarterof the total number of votes cast are negative. If the approval criteria are not met, the text isreturned to the originating TC/SC for further study and a revised document will again be
circulated for voting and comment as a draft International Standard.

Stage 5: Approval stage

11

Copyright 2007. No quotation or citation without attribution.
The final draft International Standard (FDIS) is circulated to all ISO member bodies by
the ISO Central Secretariat for a final Yes/No vote within a period of two months. If technicalcomments are received during this period, they are no longer considered at this stage, butregistered for consideration during a future revision of the International Standard. The text is
approved as an International Standard if a two-thirds majority of the Members of the TC/SC
is in favor and not more than one-quarter of the total number of votes cast are negative. If
these approval criteria are not met, the standard is referred back to the originating TC/SC forreconsideration in light of the technical reasons submitted in support of the negative votes.

Stage 6: Publication stage
Once a final draft International Standard has been approved, only minor editorial changes,
if and where necessary, are introduced into the final text. The final text is sent to the ISO
Central Secretariat which publishes the International Standard.
In addition, ISO has established the general rule that all International Standards should be
reviewed at least three years after publication and every five years after the first review by all
the ISO member bodies. A majority of the members of the TC/SC decides whether anInternational Standard should be confirmed, revised or withdrawn.
To date, ISO's work has resulted in over 16 000 International Standards, representing
more than 620 000 pages in English and French (terminology is often provided in otherlanguages as well).ISO standards list appears in the ISO Catalogue.

D. Standards Driven by the Market
ISO 14001 has become the market-oriented instrument to direct consumers’ purchasing
behavior and its application to the automobile industry is growing rapidly. ISO 14001 aims to
educate consumers about the environmental and social effects of automobile production andconsumption in order to advocate changes in purchasing behavior and reduce negativeenvironmental impacts. Companies are induced to use environmentally and socially preferred
production with the expectations of gaining a greater market share and higher profits.

12

Copyright 2007. No quotation or citation without attribution.

V. Honda and Its Environmental Policy
A. Overview
Along with the establishment of organization-wide environmental management, each of
Honda’s facilities is introducing environmental management systems to continuously improvetheir ability to protect the environment and to more thoroughly mitigate the environmental
impact of substances of concern. Honda has been proactive in acquiring environmental
management ISO 14001 certification for its production and other facilities. In Japan, all of
Honda’s production facilities had acquired certification by Fiscal Year 1998. Further, theHonda Motor headquarters building acquired certification in 1999, followed by six otherregional offices in 2001. Honda is also working toward certification of all major facilities allover the world. Honda’s ISO 14001-certified facilities total 56 sites as of the end of 2007.
There are several reasons why Honda chooses ISO 14001 Certification. First, Honda isundergoing a transition from a multi-national company to a global company. It needs a seriesof widely accepted standards in the world to market its products globally. Having its products
ISO 14001 certified helps remove trade barriers of some countries, especially the developed
countries. Second, Honda wants to enhance its image as a responsible company and increase
public credibility, which may become a potential competitive advantage. Third, adopting
unified standards helps Honda establish a single management system, standard and process
for its diverse international and domestic markets. It will be more productive. Fourth, third
party certification provides advice for improvement, which may reduce some costs. Finally, if
ISO certified, Honda will improve relations with government.
Honda’s EMS manages the primary environmental issues through objectives for
improvement, assignment of responsibilities, emergency response capability, self correction
and assessment, and internal reviews. To minimize its impact on the environment, Honda hasestablished the World Environmental Committee. Its duties are carried out by the heads ofdifferent business operations, regional operations and functional divisions. This means that

13

Copyright 2007. No quotation or citation without attribution.
the whole company is involved in the operation of the EMS. The duties are distributed among
specific departments, making the committee more effective.

Source: http://world. honda.com/environment

Honda also introduces environmental management systems at every stage of productlifecycles. In North America, 13 of the 14 Honda plants operating in Fiscal Year 2007 were
third-party certified to the ISO14001:2004 standard. The remaining new plant will be certified
by December 2009.

B. Green Purchasing
Honda has Green Purchasing Guidelines, and is working with its suppliers to maximize
procurement of materials and parts with minimal environmental impact. In 2001 Honda asked
its 1st Tier suppliers and Honda joint ventures to introduce ISO 14001-certified environmental
management systems. Honda is now attempting to assist the suppliers and other plants in theirefforts to implement an EMS. It has also requested other suppliers to seek registration.

14

Copyright 2007. No quotation or citation without attribution.
C. Green Dealers
Honda also developed the Green Dealer certification system to verify implementation of
Honda’s EMS. Good Green Dealer Certification is awarded to dealers that comply withenvironmental regulations and Best Green Dealer certification is awarded to dealers that have
improved their environmental practices.

VI. Certification Process of Honda
A. ISO 14001 Certification of Honda includes five phases:
Phase 1: Preliminary Environmental Evaluation
Phase 2: Systematic Documents Preparation
Phase 3: Trial Operation of EMS
Phase 4: Internal Evaluation
Phase 5: External Evaluation

The internal evaluation includes a continuous PDCA circle led by the World
Environmental Committee and internal auditor training. This graph shows that both theRegional Environmental Committees and Individual Departments go through the four phases.
The latter put them into daily work because they have a direct impact on the environment.
Participation throughout the organization makes the EMS more effective.
Phase 1: Establishing the environmental goals and the elements of the EMS (Plan)
Phase 2: Implementing the EMS (Do)
Phase 3: Checking for any problems and correcting them (Check)
Phase 4: Evaluating the effectiveness of the EMS and improving it, and launching into a
new cycle of improvement (Act)15

Copyright 2007. No quotation or citation without attribution.

Source: http://world.honda.com/environment

B. ISO 14001 Internal Auditor Training
Besides, Honda gives environmental education for each employee to understand his/herrole in the company’s environmental activities and to take part in such activities as part oftheir daily business activities. Various education programs are provided for “new employees,”“employees working for two to eight years,” and for “those to be promoted to managers.”
Honda pays the consulting firms to train key personnel to be successful internal auditors.
Every factory and office develops plans for training programs based on their EMS and holds
regular training events for all personnel, operators engaged in environmental operations, andinternal auditors. Besides, immediately after joining Honda, new associates visit Honda plants
to receive presentation about Honda’s environmental philosophy, initiatives, and ISO 14001
Certification and to get experience. After the training and internal auditing, the specialists
recommend the company on which external certification body to choose.
Honda has realized many benefits from their EMS. Employees realize the effect theirroutine tasks have on the environmental factors of the plant’s operation. They find ways toimprove the things they do. The departments and different lines now work together on waste
issues and process improvements. They take into consideration how their material and waste
fits into the overall production and take responsibility for finding solutions which won’t cause
greater problems for another department. In 2007, the internal environmental audits led to 77
recommendations and advisories, and 195 findings.

16

Copyright 2007. No quotation or citation without attribution.
Honda conducts product recalls in accordance with the guidelines of the Quality
Committee. In Fiscal Year 2007 no environment-related product recalls were required. In
anticipation of accidents or emergencies that could cause environmental pollution, eachfactory and department has clearly defined procedures for the prevention or mitigation ofpollution. Emergency drills and training events are held regularly to increase emergency
preparedness. There were no environment-related emergencies in Fiscal Year 2007.
1. Training Topics:

2. Learning Outcomes:

The requirements of ISO 14001

Better understanding of the ISO 14001

How to plan, perform and report on an audit

Tips for Effective Auditing

How to take corrective action.

Preparing and Using Checklist

Architecture of the ISO 14001 Documentation

How to Seek Objective Evidence

Preparation of Checklists

Hands-on/Practical Experience

Nonconformities – Major and Minor

Internal Auditor Certificate

Seeking Objective Evidence ThroughIdentify opportunities for improvement

Documentation

VII. External Evaluation & Monitoring

To verify that the environmental management systems are appropriately implemented andare continuously being improved, environmental audits and inspections by external certifiers
are conducted at Honda’s factories and offices. The external evaluation is carried out by
external certifiers in several steps.
1. The certifiers give Honda a questionnaire about its EMS several weeks before the on-site
inspection. Only some key managers participate in the survey.
2. Honda is required to submit its EMS documents before the on-site inspection
3. The certifiers interview with the employees. They pick the employees by their ID and ask
the factory manager to notify them to come to the interview.

17

Copyright 2007. No quotation or citation without attribution.
4. The certifiers conduct on-site certification. The external certifiers are always accompaniedby the internal certifiers.
The external surveillance inspections led to 21 minor recommendations and 122 findings.
Honda responded with corrective action. Further, the Inter-Facility Environmental Audit isconducted by engineers and auditors from other factories under the instructions provided by
the Environmental Administrators Committee.
After a Honda facility gets the accreditation, the ISO will usually monitor it once or twicea year. Several days before the monitor comes, the ISO certifier will notify the head of theenvironmental committee at the factory. Then they consult with each other to decide the dateof inspection. After that, Honda often announces the closure of the factory for economic
reasons. ISO does not prove that the reason for closure was true or not.
To keep the ISO Certification, Honda would be required to source a certain percentage of
their parts only from those factories which received an ISO 14001 certificate. This could limit
Honda from purchase products from uncertified or undesignated suppliers.

VIII. Critiques of ISO
Some features of ISO might make it and its certification less credible. When we buy
ISO-labeled products, we have to think twice to make a better decision.

A. Financial Sources
The ISO is a non-profit organization and their financial records are available for public
view in their annual report. Theoretically, ISO is primarily dependent on donations fromcharitable trusts for their activities and do not derive income from the companies certified orundergoing certification for their operational costs. However, the ISO also has a professional
member base that is willing to pay them thousands of dollars annually. Honda pays fees to thecertifiers for certification, though not ISO directly. It could leverage their donations for
decision making that would favor it. There are some indicators that Honda even “bribes” the18

Copyright 2007. No quotation or citation without attribution.
certifiers in various names. In 2006, it is reported by the media that Guangzhou Honda in
China gave the local environmental protection bureau twenty “Environmental Inspection
Cars”. It was publicly applauded as Honda’s “commitment to environmental protection”.
Since China’s press has a “reputation” for corruption, who knows Honda’s relationship withthe reporters and the certifiers? If Honda’s cars are ISO 14001 certified, are they reliable? The
relationship between the consulting firms and the ISO certifiers is unclear. Since Honda pays
the consulting firms, they may help develop connections between Honda and the certifiers.
The consulting firms recommend Honda on which certifier to choose. It is in their common
interests to let Honda pass the test.
ISO is not a pure NGO. Its members are governments. Member bodies, correspondent
members and subscriber members make different contributions to the ISO. Government
agencies in richer nations pay more and become member bodies which have the right to votefor the principal officers. They can influence the decision of ISO. This puts poorer nations at a
disadvantage in obtaining certification. ISO might be biased toward different members.
B. Problems with Monitoring
ISO inspections of Honda are actually conducted after notification, especially in somecountries where there are too many loopholes in the law. Only selected sites in a factory areinspected. Certification is narrow, but application is wide. Honda can often take advantage ofthe lack of oversight and only implement their EMS when a certified monitor is present.
The employees interviewed are under the pressure not to criticize his own factory because
his boss knows that he is chosen for the interview. When they are interviewed, they just do asurvey. The public do not know about the content. The design of the survey is questionable.
C. Conflict of interest in case of Violations
Noncompliance should lead to decertification. But there is a conflict of interest. The
certifiers are paid by Honda. They also hope that Honda can pass the certification in order tomaintain a profitable member and potential future partner. Decertification is rare. ISO 14000
is hard to get but even harder to lose. Once certification status is granted, certification bodies

19

Copyright 2007. No quotation or citation without attribution.
are required to return to audit Honda only once a year and never randomly. ISO has limited
ability to monitor the daily processes, and has little information about what the certification
bodies are doing.
D. Lack of Employee Awareness and Publicity
To my surprise, when I called Honda America, the operator had not heard of ISO 14001.
She even did not know who to ask. She put me through to a Corporate Affairs person. Also
ignorant of ISO, that lady said that there is no special Environmental Department. Up to now,
she has not found anyone in charge of ISO 14001. She will keep me posted. On the other hand,
ISO 14001 standards are sometimes too professional for the consumers to understand.
Information is not transparent. ISO does not publicize how they select the certifiers to inspecta particular company. ISO does not regularly communicate with any automobile associations
to get advice for its standards and make its standards concise and meaningful to thenon-professional stakeholders.
E. The real benefits of ISO 14001 are questionable.
The improvement of EMS is a long-term process with few immediate benefits. Honda
might only look at its short-term interests and do not strictly follow the ISO 14001 standards.
The author does not find any evidence that ISO certified automobile makers are making moremoney than they would have if they had not undergone the process. For example, Honda’s
rival, Toyota, does not use ISO standards because it considers the dues to be an unnecessary
outlay and its own standards have already earned it a high reputation. If Honda’s original
EMS is generates more profits, why does it accept ISO 14001? Honda might have to spend a
lot of money and resources on accreditation over a short period of time while it can devotethese resources to R & D. In addition, Honda should also have outside assistance, and finding
a consulting firm who met their needs was also a challenge. Getting ISO accreditation ispossibly just for show-off or Honda’s activities now are not environmentally friendly at all.
ISO 14000 will not help companies understand what the most important subject inmanagement is. How should Honda have an effective organizational structure to comply with

20

Copyright 2007. No quotation or citation without attribution.
the ISO 14000 standards and improve its performance? ISO 14000 is more technical thanmanagerial. It provides few feasible solutions and suggestions.

IX. Suggestions
Questioning the ISO helps people find solutions to the problems. The problems with ISO
14001 today make it less credible. However, because there are few alternatives to it now, it
can make improvements in several areas.
First, the main problem is its financial resources. ISO and its certifiers should not receive
any forms of donations from the companies. Its financial reports must be more detailed andmust be audited by an independent accounting firm. Second, it must regularly monitor its
certifiers and make the whole process public. Third, the biography of its certifiers should also
be posted on its website so that people will know about their background. Fourth, it cancooperate with other NGOs to make it known to the public, especially the consumers. The
businesses to be certified must also agree to educate its employees about ISO. Otherwise, itcannot get the certificate even if its EMS meets the requirements. Fifth, it must not announce
its inspection date. Last, the correspondent members and subscriber members should also takethe responsibility to monitor ISO to make it more impartial.

21

Copyright 2007. No quotation or citation without attribution.

X. Suggested Items for Further Research
1. What, exactly, are the ISO 14001 standards for the automobile factory? What is the rangeof variation? How does the implementation of EMS according to ISO 14001 guarantee theproduction of “environmentally-friendly” automobiles?
2. Is Honda’s Green Dealer certification system designed to encourage eventual ISO 14001
certification? Or is it an environmental management system unto its own?
3. Have any of Honda’s factories ever been sanctioned?
4. What is the relationship of “external certifiers” with the ISO and with Honda? How big is acertification team? What are their credentials and how are they trained? Who pays them?
What steps does a typical certification entail?
5. Is Honda a participant a subscribing member of the ILO? Is Honda involved in setting the
ISO 14001 standard for automobiles?
6. Which consulting firms does Honda use for training its own internal auditors? How
credible is this form of self-monitoring? What metrics does Honda employ to evaluate its own
EMS performance and compliance?

22

Copyright 2007. No quotation or citation without attribution.

XI. Discussion Questions
1. Does Honda seems more environmentally-friendly than Toyota because it adopts the ISO
14001 standard in implementing environmentally-management systems? Do you, as aconsumer, believe it makes much of a difference?
2. In what ways does the implementation of ISO 14001 benefit Honda? Do you think ISO
14001 is just a baseline signal of Honda’s environmental commitment? Or do you believe it
be a comprehensive strategy that is a core part of its business process?
3. Apply Kristyn Wilcox’s case study,”ISO 14001: An Analysis” to Honda’s case. How
robust and effective do you find the standard in Honda’s context? What other programs does
Honda implement to demonstrate its environmental differentiation? To what extent do you
believe these programs to be “greenwashing”?
4. The author states, “ISO 14001 aims to educate consumers about the environmental andsocial effects of automobile production and consumption in order to advocate changes inpurchasing behavior and reduce negative environmental impacts.” To what extent are you
familiar with ISO 14001? Have you heard of it in relation to the automobile industry? Will it
affect your decision to purchase a vehicle?

23

Copyright 2007. No quotation or citation without attribution.

XII. References
1. International Organization for Standardization(ISO)www.iso.org

2. Honda Motors Environment Web Page http://world.honda.com/environment/
3. Guangzhou Honda Homepage http://www.guangzhouhonda.com.cn
4. Quality Management International http://www.qmi.com/registration/iso14001
5. Clean Car Campaign

http://www.cleancarcampaign.com

6. Matthew C. Owens, “Sustainable Seafood Labeling:

An Analysis of the Marine

Stewardship Council”, 2007
7. James Snavely, The U.S. Green Building Council: Designer of the Green Building
Industry, 2007
8. Kristyn Wilcox, “ISO 14001: an analysis”, 2007
9. Laura Tierney, “The Center for Resource Solutions: Can CRS Monitor the Voluntary
Greenhouse Gas Offset Market?”, 2007
10. Eric Engelman, “Market Transformation: How the U.S. Green Building Council
revolutionized the building industry”, 2007