Benchmarking environmental performance: five leading steel mills in India

Abstract

PurposeThe purpose of this paper is to review general applications of the ISO14001 certification process and show how limitations such as ensuring minimum environmental performance standard, public access to performance information, and peer benchmarking may be overcome by voluntary commitment to attainable standards by association of specific industries.Design/methodology/approachA replicable environmental performance (weighted) index was developed by the authors. Secondary data obtained from five (public and private) steel mills provided technical data under voluntary compliance standards. Primary data on non‐technical items of performance index were collected. The index was tested to demonstrate peer benchmarking process.FindingsISO 14001 certification cannot serve as an end in itself for industries as peer companies under voluntary compliance may exceed environmental performance. Minimum acceptable environmental standards could be enforced through industry‐wide consensus. Public access to performance indicators can be ensured under a voluntary mandate; peer benchmarking may allow for competitive goal setting. The model proposed could be gainfully replicated particularly in developing countries.Research limitations/implicationsThe weighted index used in the paper could be further expanded to include additional non‐technical items such as occupational employee health and R&D expenditure of plants on environmental management system.Practical implicationsPeer benchmarking should allow for competitive goal setting for continuous improvement. The weighted index could be replicated for other industries in India. This index with minor adjustment, if needed, could be used in other countries and by industries already certified by ISO 14001 standards for peer benchmarking toward continuous improvement.Originality/valueThe weighted index is the original contribution. It is likely to make definitive contribution to the literature of environmental performance measurement. It also makes a contribution to the benchmarking literature in general and to peer benchmarking in particular. The paper not only shows the limitation of ISO 14001 standards but demonstrates how to overcome the limitations toward the competitive goal setting and continuous improvement of performance by the benchmarked industries.