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ISO 50001: The New Energy Management System Standard

Energy management is more than saving money—it is about understanding processes and energy patterns, setting realistic goals and monitoring progress, and protecting natural resources while leveraging alternative ones. Adopting a firmwide commitment to energy best practices is one way that organizations can meet today’s cost-cutting and long-term energy efficiency goals.

A formal energy management program helps document, understand and improve energy usage. In 2011, the International Organization for Standardization (ISO) released ISO 50001 – Energy Management Systems (EnMS). This voluntary standard serves as a model to elevate energy management and conservation efforts by embedding awareness, best practices and increased value firmwide. With broad applicability across economic sectors, it is estimated that the standard could influence up to 60 percent of the world’s energy use.*

Immeasurable Benefits
From the same foundation as ISO 9001 – Quality Management Systems and ISO 14001 – Environmental Management Systems, this new auditable standard is based on a management system model familiar to many companies. It establishes a framework for industrial plants, facilities and organizations to uniformly apply operational procedures for short-term and future benefits.

While the primary drivers of an energy management system are reduced costs and environmental responsibility, benefits extend beyond lower utility bills. Implementing an energy program may help identify additional energy reduction opportunities, streamline or improve existing processes, support corporate sustainability initiatives, and increase shareholder value. For multinational companies, certain countries may require these standards in place to conduct business. From a societal perspective, a business may be recognized as a leader in the sustainable use of energy resources, improving their brand and making products more attractive to consumers.

Steps to Success
There are seven major components to ISO 50001, and collectively they follow a plan-do-check-act approach. The first four steps help with the planning and actions to achieve targets and goals; the latter three focus on implementing organization or cultural changes. To be successful, this must be a continuous process championed at all levels with all elements working in unison.

  1. The General Requirements proclaim the organization’s basic need(s) to want to make an improvement. If there is no desire or driving force for improving energy management, then the rest of the process is essentially moot. After all, this program is still voluntary. 
  2. Management Responsibility formalizes the organization’s commitment to energy management, including c-suite and senior management endorsement; definition of roles, responsibilities and authority; and dedication of staff and resources. 
  3. An Energy Policy is management’s “official statement” that commits the organization to set objectives and targets. The policy should address the products and processes that offer the most potential energy savings, such as using renewable energy or reducing emissions. 
  4. An Energy Action Plan prioritizes opportunities for energy improvements. It identifies key drivers of energy use; facilities, equipment and processes that use it the most; and individuals who can significantly affect change. The plan also includes the change in business practices (i.e., shifting sources from electricity to natural gas or solar, mandating LEED©-based construction guidelines) and establishes energy performance indicators to measure success. 
  5. Implementation and Operation is where the energy management system becomes an integral part of doing business. Steps include rolling out the program, communicating it to all staff, ensuring individuals involved are trained in their roles/responsibilities, and documenting the commitment and progress to external stakeholders. 
  6. Performance Audits ensure the program conforms to the plan, personnel are executing steps, monitoring is ongoing and accurate, and recordkeeping is complete. Auditors should be familiar with the action plan but not responsible for its execution. Nonconformities should be carefully reviewed to determine reasons, if goals were realistic, corrective actions, and follow-up assessments. 
  7. Management Review is critical to determine extent to which objectives and targets have been met; review performance of all projects, audit report and corrective actions; and take action based on results.

Self Check
It is important for a business to conduct a thorough self assessment of its current performance, goals and requisite level of effort before deciding to embark on an energy management program. For firms with energy management procedures already in place, it may be less of a reach to take on the standard and make adjustments. For firms just beginning the practice, the exercise will be more intense and may require a significant cultural shift. And even though this is a standard, there are varying degrees of implementation—ranging from an informal checklist and action items to achieving full certification through independent auditing. Determining the path and achievable success depends on business capabilities, goals and strategies.

Be Informed
For more information on energy management and ISO 50001, please contact Matt Goss at +1.518.782.4500 or gossmt@cdmsmith.com. You can also find more information on this topic on the following websites:

ISO 50001 website: Energy Management

ISO videos: www.youtube.com/PlanetISO 

To find the ISO member in your country: www.iso.org/isomembers 

CDM Smith Industrial Outlook: Management Systems Overview

*2007 U.S. Energy Information Administration survey citing global energy consumption by sector, including 7 percent by the commercial sector (defined as businesses, institutions, and organizations that provide services), and 51 percent by the industrial sector (including manufacturing, agriculture, mining, and construction). As ISO 50001 is primarily targeted at the commercial and industrial sectors, adding the above figures provides an approximate total of 60 % of global energy demand on which the standard could have a positive impact.