What is the ISO 50001 Energy Management Standard?

Ed Note: Want to learn more? Join us for a joint course in Chicago with UL-DQS on the ISO50001 standard as well as a GRI certified course in sustainability reporting. More information here.

By Don Macdonald, UL DQS Director of Sustainability & Energy Management

The need for deriving financial value from under-utilized resources, for cost savings in energy consumption, and the necessity of fulfilling each organizations bottom line objectives are driving American companies to take action.

Before the backdrop of rising energy costs, “energy efficiency” has become a major topic on the agenda from the C-suite to the shop floor, especially for energy-intensive industries, but more so for cash-strapped organizations in the supply chain of every sector. Opposite this, global government organizations are driving legislation and tax incentives tied to evidence of continuous improvement. So where does all this lead? Perhaps the ISO 50001 energy management standard is part of the solution.

Sustainability is the driving social force behind this innovation disruptively unlocking wasted resources, corporate valuations, and will certainly be one of the strongest growing areas in corporate organizations for years to come. Unfortunately for many, sustainability was perceived to be born out of the tree-hugging communities and brings with it an incorrect notion of little regard for financial shareholder value or profit motive. This, however, is changing, as organizations connect energy use and consumption with greenhouse gas and carbon programs, rising prices and profit pressures. This congruence of concerns around cost, supply, reliability and environmental impacts of the energy needed to sustain our business and way of life are increasingly influencing business at the highest levels.

As a result of this rapid change in perceptions, corporate America has reached a tipping point, with companies across all industries now making the cost, availability and environmental impact of their end-to-end energy consumption a strategic priority. They are now frequently viewing energy management as risk management. What once was managed as a cost of doing business is increasingly being managed as a strategic risk – and as a source of new value and opportunities. UL DQS even sees cutting edge organizations using ISO 50001 energy assessments as part of the due diligence process. Organizations that have adopted energy management plans have achieved major improvements, whether for certification or not. See results and adoption information in an executive briefing paper and case studies link.

When sustainable actions are based on verifiable management systems, organizations realize value-unlocking benefits in operational areas ranging from cost savings to cash-flow improvement to preservation of CAPEX budgets. The end product of the EnMS (Energy Management) standard is to provide a measureable performance benchmark, enhancing ROI (Return on Investment) calculus and achieving improvements in changes to how energy is managed. Standardized energy performance assessment processes are the foundation of sound greenhouse gas (GHG) and carbon reporting.

Organizations are improving their environmental balance sheets regardless of location, size, industry sector or type of energy consumed applying these behavioral management system tools. Additionally, governments in many countries and supply utilities increasingly make use of “carrot and stick” opposite these to demonstrate evidence of well-deployed funds of energy, GHG or carbon savings.

Organizations that have adopted effective energy management strategies and built successful energy programs, typically have similar operating results for GHG and carbon management: Ford Motor Company has saved over $75 million through effective energy management; Schneider Electric is savings millions through implementation of ISO 50001; Hines estimates the difference in operational costs between its energy efficient buildings and inefficient buildings at more than $13 million; Fairfax County Public Schools estimates an annual energy savings of $4.5 million from energy efficiency improvements; and Case New Holland (CNH) recently certified to ISO 50001 with similar results.

Innovative IT-based tools are exploding onto the marketplace. Many traditionally coming from dashboard analytics with robust energy reporting engines are now being complimented or themselves include behavioral management systems processes to ensure continuous improvement. One such innovative tool is ENERIT’s ISO 50001 Platform. ENERIT recognized early on the need to combine both energy engineering and a behavioral management system solution.

To date, ISO 50001, on a comparable basis, has eclipsed ISO 14001 in terms of adoption rate. Today, over 1400 entities have completed this process and many, many more are applying this standard as a best practice.

Don Macdonald will be a featured guest speaker at our upcoming GRI Certified Sustainability Reporting training coming up in San Francisco.

[image credit: Gus Thomson: Flickr cc]