ISO 14000, Environmental Management, Sustainability

Identification of
Environmental Quality Costs and Technological and Environmental Risk Indicators (IRTA) in
Environmental Management

ISO 14000, Environmental Management, Sustainability

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ISO 14000, Environmental Management, Sustainability

Marco Antonio Gaya de Figueiredo, M.A.G., M.Sc.
Production Engineer
Division of Petrochemistry and Polymers, Petrobras, R&D Center (CENPES)
E-mail: or

This article is heavily excerpted here to reduce download time, offer universal concepts, and encourage the reader to contact the author for more information. The entire article is 16 pages with illustrations and in Word format. Please email the author for the complete article and to make comments.


This work identifies the cost associated with environmental quality (preservation and improvement of environmental conditions of productive processes), as well as the related total (external and internal) process failure cost.

An environmental technological risk (IRTA) is defined, relating operational costs and total (internal and external) failure costs with views to environmental management strategy.

A survey of environmental management systems and performance indicators employed in Brazil and worldwide is presented.

A case discussion of environmental costs in a Research and Development Center is proceeded, monitoring and evaluating the IRTA throughout the study.

In conclusion, the adequacy of using environmental cost identification and IRTA evaluation as a tool for an effective environmental management is assessed.


An analysis of the current state of the Brazilian chemical industry reveals that the actually used technologies were transferred in a period where industrial waste generation, treatment and disposal represented a significant part of total production costs. A not too strict legislation at that time allowed disconsideration of externalities and poor environmental concern. Environmental management was restricted to the monitoring of the cost and volume of effluents transferred to waste disposal plants and landfills in the observance of sanitary inspection rules, without any regard to inadequate process performance.

On the micro-environment scale, action was limited to programs of accident prevention and use of individual protection equipment, without adequate monitoring of occupational health and programs for minimizing inherent process risk.

Rising concern with the environmental impact of processes have led to stricter rules and monitoring parameters with regard to working conditions and waste disposal. In response, industries started to rethink their production processes with an eye to eliminate or minimize industrial process failures. As such, new and easily established parameters were needed to subsidize the decision maker's choice of the best way to allocate resources for improving the environmental performance of the process.

Environmental Management

Environmental management is an integrated activity that aims to conform performance with established norms in environmental and labor law.

Accordingly, environmental managers should perform several actions to elucidate the environmental performance of the process, such as: to the decision maker
      - financial aspects of the activity to the technicians
      - state of the process as a whole to the community       
      - process performance with respect to externalities

Five stages can be identified in environmental management:
      Stage (0): without management
      Stage (1): observance of legislation
      Stage (2): system development and implementation
      Stage (3): integration with several management areas
      Stage (4): integration with total quality

Environmental Performance Assessment

The following main purposes of the quantitative monitoring of a process by means of an environmental performance indicator can be specified:
     - monitoring over time of the condition and evolution of the environment
     - assessment of the performance of projects, programs and plans
     - management control of the process for process improvement
     - demonstration to all interested parties of the continuous improvement of products and processes
     - helping in the development of future plans.

Operational Systems Indicators

Operational system is defined as the set of activities related with the design and operation of physical installations, equipment and mass and energy flow, for the deliverance of products and service. The following categories can be specified for the study of these indicators:

     - program oriented measures
     - activity based measures
     - mass based measures
     - standardized efficiency measures
     - concentration based measures

Management Indicators

Management systems involve all proceedings and activities related to organization, planning, resource allocation, operational control of process, feedback and checking of performance results, identification of the cause of deficiencies and illustration of the progress made toward the established goals of environmental improvement. The working up of this indicator includes: indicators of the satisfaction and behavior of interested parties/observers, financial indicators, etc.


This indicator refers to the interaction environment - operational system - environment. The organizations should select in function of its potential in environmental improvement. It is not necessary to assess directly its effects on the environment.

The state of the environment can be divided in three categories: impact on natural resources, ecological resources and on human health. The first category bears respect to the nature and use of land, the consumption of nonrenewable resources, desertification and erosion, impact on productive land, on arqueology, a.s.o.; biological aspects (local, regional and global) include irreversible and reversible impacts, impact on biologic diversity, a.s.o.

Ecological impacts relate to climate changes, ozone layer depletion, acidizing (regional), euthrofication (local and regional), ecotoxicity, etc. Human health refers to impacts that contribute to toxicology, as well as physical and psychological impacts.

Environmental and Technological Risk Indicators

The main purpose of identifying the environmental quality costs is to subsidy the decision maker in monitoring the performance of the environmental management system. The aim is to identify possible process failures with direct or indirect impact on the environment and sensible investment areas. The Environmental and technological risk indicator (IRTA) is defined as the rate between total cost of failure (internal and external) (CF) and total expenditure (TE).


As the insurance of industrial installations seeks to minimize the financial risk from damage due to accidents, the premium to be paid is correlated with the risk level of the installation. The main purpose of an environmental management system being risk of failure minimization during manufacturing, all related expenses should be considered prevention cost in the sense that an improvement reduces the premium paid and vice-versa.

The main purpose of the studied indicators is to represent an effective program of environmental management. This program can then be used to check the performance and to help the decision making process in choosing new investment or action areas


R&D activity involves the following development steps: survey of the state-of-the-art of the proposed process, preliminary laboratory tests, systematic tests on laboratory scale, economic assessments, pilot studies to establish the project base, process implementation on a semi-commercial or commercial basis acting in several technological segments.

In view of this, establishing an environmental management system in a R&D area starts with the indication of a specialist with a knowledge of the various activities and the creation of a management structure embracing segments such as: technical area, maintenance, safety and occupational health. This approach will allow the detailed identification of all costs enabling the formulation of an Environmental and Technological Risk Indicator as efficiency parameter for the referred system.


ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000 ISO 14000  
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