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GENERATING COST SAVINGS THROUGH
EFFECTIVE ENERGY MANAGEMENT
A DISCUSSION ABOUT THE CHALLENGES AND OPPORTUNITIES ASSOCIATED WITH ENERGY
SAVINGS IMPROVEMENTS
MAY 2013
AUTHOR
Eric G.T. Huang
Global Product Manager, Energy/Sustainability, SGS
1
I. EXECUTIVE SUMMARY
CONTENTS
ABSTRACT
The purpose of this document is to provide an introduction to the
ISO 50001:2011 Energy Management System (EnMS) certification
requirements. This document is not intended to be a full explanation of the
certification standards and related requirements or of its implementation.
Rather, it aims to promote understanding of the standard and to enable
organisations to establish the systems and processes necessary to reduce
energy costs, boost efficiency, and enhance competitiveness.
I. EXECUTIVE SUMMARY	 1
II. GLOBAL ENERGY MANAGEMENT	 2
III. ENERGY MANAGEMENT SYSTEMS STANDARDS	 5
IV. GLOBAL SOLUTIONS FOR ENERGY MANAGEMENT	 9
V. HOW ISO 50001:2011 RELATES TO OTHER INTERNATIONAL STANDARDS	 11
VI. INTEGRATING ENVIRONMENTAL AND ENERGY
MANAGEMENT SYSTEMS: PROCESS AND BENEFITS	 15
VII. CASE STUDY – AU OPTRONICS BENEFITS FROM IMPLEMENTING ISO 50001	 17
VIII. CONCLUSION	 18
“Energy efficiency is the most promising
means to reduce greenhouse gases in
the short term,” said Yvo de Boer, Former
Executive Secretary of the United Nations
Framework Convention on Climate
Change (UNFCCC). Thomas L. Friedman,
the foreign affairs columnist for The New
York Times and a three-time Pulitzer
Prize winner in his no. 1 bestseller “Hot,
Flat, and Crowded” stated “We cannot
continue the business as usual path. We
need a green revolution and we need to
focus on ET – Energy Technology – based
on renewable energy production and
energy efficiency.” This is the beginning
of a new era – the “Energy Climate Era”.
Energy conservation technology and
facilities/equipment are only part of the
approach to improve energy efficiency.
Systematic management and the
behaviour approach have become the core
efforts to improve energy efficiency today.
The purpose of ISO 50001:2011, the
EnMS standard discussed in this paper,
is to enable organisations to establish
the systems and processes necessary
to improve energy performance and
increase cost savings. They are based on
the continual improvement and Plan-
Do-Check-Act approaches utilised in the
ISO 9001 and ISO 14001 management
systems standards to provide
compatibility and integration opportunities.
Implementing these standards should
lead to reductions in energy costs with a
positive effect on an organisation’s bottom
line, while minimising greenhouse gas
emissions and the overall negative impact
on the environment.
2
II. GLOBAL ENERGY MANAGEMENT
THE CHALLENGE OF THE
‘ENERGY-CLIMATE ERA’
What are the greatest problems
facing humanity today? As far back as
2003, the Nobel Laureate Richard E.
Smalley outlined what he said would
be Humanity’s ‘Top Ten Problems for
the next 50 years’ he placed energy
consumption first on the list in response
to the projection that world population
would increase from 6.5 billion to
8-10 billion by 2050.
In recent years, many people have listed
energy as a growing problem. Certainly
many of our environmental problems
today arise from the types of energy we
use, and the increasing burning of fossil
fuels will accelerate climate change.
The global climate system is warming,
with an increase in the frequency
and intensity of extreme weather and
climate events such as heat waves,
cold spells, heavy rainfall, droughts and
tropical cyclones, and a rise in the sea
level. It was confirmed by the United
Nations Intergovernmental Panel on
Climate Change (IPCC) that the warming
of the climate system is unequivocal.
Eleven of the twelve years between
1995 and 2006 ranked among the
twelve warmest years since 1850. The
temperature increase is widespread
over the world, with both rising sea level
and decreases in snow and ice extent
consistent with warming.
Current energy and CO2 trends run
directly counter to the repeated
warnings sent by the IPCC, which
concludes that reductions of at least
50% in global CO2 emissions compared
to 2000 levels will need to be achieved
by 2050 to limit the long-term global
average temperature rise to between 2.0
degrees C and 2.4 degrees C. Recent
studies suggest that climate change is
occurring even faster than previously
expected and that even the ‘50% by
2050’ goal may be inadequate to prevent
dangerous climate change.
However, the world needs ever
increasing energy supplies to sustain
economic growth and development. But
energy resources are under pressure
and CO2 emissions from today’s energy
usage already threaten our climate.
What options do we have for switching
to a cleaner and more efficient energy
future? How much will it cost? And what
policies do we need?
According to the International Energy
Agency (IEA) ‘Energy Technology
Perspectives (ETP) 2010’ report, the
next decade is critical. If emissions do
not peak by around 2020 and decline
steadily thereafter, achieving the
needed 50% reduction by 2050 will
become much more costly. Following
this earlier report, the IEA released its
ETP 2012 2°C Scenario (2DS) exploring
the technological energy efficiency
and balanced energy system options
that are needed to realise a sustainable
future. Central to this is the use of
renewable energy sources and ensuring
lower emissions.
According to the 2DS, energy savings
and the use of alternative energy
sources could save countries a total
of 450 exajoules (EJ) in fossil fuel
purchases by 2020. This is comparable
to the last six years of total fossil fuel
imports among all OECD countries. By
2050, the cumulative fossil fuel savings
potential is said to be almost 9 000 EJ
– equivalent to more than 15 years of
current world energy primary demand.
The 2DS demonstrates how energy
efficiency and accelerated deployment
of low-carbon technologies could help
cut government expenditure, reduce
energy import dependency and lower
emissions. ETP 2012 explains why
energy efficiency must be driven to
achieve its potential. Being energy
efficient will help cut emissions and
reduce the energy intensity (measured
as energy input per unit of gross
domestic product [GDP]) of the global
economy by two-thirds by 2050. In
this regard, information and energy
management are proven and effective
ways to encourage energy efficiency
measures in industry.
Thomas L. Friedman, the foreign affairs
columnist for The New York Times,
and a three-time Pulitzer Prize winner,
explains in his number one bestseller
‘Hot, Flat, and Crowded’ a new era
through his illuminating account of
recent events: ‘the Energy-Climate Era.’
He shows how 911, Hurricane Katrina,
and the flattening of the world by the
Internet have combined to bring climate
and energy issues to Main Street. ‘We
can no longer expect to enjoy peace
and security, economic growth, and
human rights if we continue to ignore
the key problems of the Energy-Climate
Era: energy supply and demand, petro-
dictatorship, climate change, energy
poverty, and biodiversity loss. How
we handle these five problems will
determine whether we have peace and
security, economic growth, and human
rights in the coming years’. As Friedman
defines, the era concerns itself with the
energy and climate problems, both of
which are widely debated and needing
solutions; but they have not gone very
far, the much-touted ‘green revolution’
has hardly begun.
3
A MAJOR OPPORTUNITY
‘Energy efficiency is the most
promising means to reduce greenhouse
gases in the short term,’ said Yvo de
Boer, Former Executive Secretary
of the United Nations Framework
Convention on Climate Change
(UNFCCC). Thomas L. Friedman also
stated in his book: ‘We cannot continue
the business as usual path. We need a
green revolution and we need to focus
on ET – Energy Technology - based
on renewable energy production and
energy efficiency.’
This is the beginning of a new era –
the Energy Climate Era. Increased
energy efficiency will become the most
important ‘momentum’ of the future.
Low-cost options for reducing actual
consumption – many of which are
already available – offer the greatest
potential for cutting CO2 emissions over
the period to 2050.
Former US Energy Secretary Steven
Chu also indicated: ‘In fact energy
efficiency is not just low-hanging fruit;
it is fruit that is lying on the ground.
And energy efficiency means money
back in your pocket because you pay
less on your energy bills.’ Energy
conservation technology and facilities or
equipment are only part of the approach
to improve energy efficiency. Most
energy efficiency in industry is achieved
through changes in how energy is
managed in a facility, rather than through
the installation of new technologies.
Today, systematic management and
the behaviour approach have become
the core efforts to improve energy
efficiency and save costs. An energy
management standard provides a
method for integrating energy efficiency
into existing industrial or commercial
management systems for continuous
improvement. Any improvements
in energy efficiencies would result
in significant reductions in carbon
emissions and increased cost savings
for the organisation.
The key question for energy
management practitioners is how to
provide the best case for successful
energy management within their
organisation, one that will achieve the
desired buy-in at top management level,
and can be implemented as a successful
management system.
The purpose of an energy management
standard is to provide an organisational
framework for industrial facilities to
integrate energy efficiency into their
management practices, including
fine-tuning production processes and
improving the energy efficiency of
industrial systems. Energy management
seeks to apply to energy use the same
culture of continual improvement that
has been successfully used by industrial
firms to improve quality and safety
practices. An energy management
standard is needed to influence how
energy is managed in an industrial
facility, thus realising immediate energy
use reductions through changes in
operational practices, as well as creating
a favourable environment for adoption of
more capital-intensive energy-efficiency
measures and technologies.1
Efficient energy management requires
the identification of where energy is
used, where it is wasted and where
any energy saving measures will have
most effect. ISO 50001:2011 provides
a structured approach that incorporates
energy management into organisational
culture, resulting in sustained energy
savings and continual improvements
in energy performance over time. This
helps to justify initial investments into
energy projects as well as to deliver
a return on investment. The key
feature of a successful EnMS is that
it is owned and fully integrated as an
embedded management process within
an organisation, energy management
implications are considered at all stages
of the development process of new
projects, and that these implications
are part of any change control process.
Without a structured approach, there is
no guarantee that energy savings will be
sustained or that return-on-investment
will be maximised.
A change in the organisational culture
is needed in order to realise industrial
energy efficiency potential. An EnMS
standard can provide the supportive
organisational framework necessary
to move beyond an energy saving
project approach to an energy efficiency
approach that routinely and methodically
seeks out opportunities to increase
energy efficiency and achieve cost
savings, no matter how large or small.
1
McKane, et al. Thinking Globally: How ISO 50001 – Energy Management can make industrial energy efficiency standard practice. Available at:
http://industrial-energy.lbl.gov/drupal.files/industrial-energy/ISO%2050001-Energy%20Management.pdf
4
III. ENERGY MANAGEMENT
SYSTEMS STANDARDS
ENERGY MANAGEMENT SYSTEM
STANDARD – ISO 50001:2011
Realising the importance of energy
management, ISO 50001:2011
was developed as the International
Standard for energy management
by the International Organization for
Standardization (ISO) in 2008. The ISO
50001:2011 energy management system
standard was published on June 15, 2011.
It is anticipated to affect up to 60 percent
of the world’s energy consumption and
has the potential to become a global trade
catalyst for industrial energy efficiency
in the same way that ISO 9001 has
for quality. This standard is expected
to achieve major, long-term increases
in energy efficiency (20% or more) in
industrial, commercial, and institutional
facilities and to reduce greenhouse gas
(GHG) emissions worldwide.
ISO 50001:2011 specifies requirements
for an organisation to establish,
implement, maintain and improve
an energy management system,
which enables that organisation to
take a systematic approach in order
to achieve continual improvement of
energy performance, including energy
efficiency, energy use and consumption.
It specifies requirements applicable to
energy use and consumption, including
measurement, documentation and
reporting, design and procurement
practices for equipment, systems,
processes, and personnel that contribute
to energy performance. Implementation
of this standard should lead to
reductions in energy costs, greenhouse
gas emissions and other environmental
impacts, through the systematic
management of energy.
ISO 50001:2011 establishes an
international framework for industrial,
commercial or institutional facilities,
or entire companies, to manage their
energy, including procurement and
use. It is applicable to all types and
sizes of organisations irrespective of
geographical, cultural or social conditions.
Conformance with ISO 50001:2011
demonstrates that a plant or company
has a sustainable EnMS in place, has
completed a baseline of energy use, and
is committed to continuously improving its
energy performance, while reducing costs.
The framework of ISO 50001:2011
encompasses a combination of technical
and strategic management aspects,
which are expected to give this standard
wide acceptability. The standard is
based on the continual improvement and
PDCA approaches utilised in ISO 9001
and ISO 14001 to provide compatibility
and integration opportunities.
DEVELOPING ISO 50001:2011
The U.N. Industrial Development
Organization (UNIDO) was one of the
earliest entities to recognise the industry
need to develop an effective response
to climate change and to the proliferation
of national energy management
standards. In March 2007, UNIDO
hosted a meeting of experts which led
to the submission of a formal request to
the ISO Central Secretariat to consider
undertaking work on an international
energy management standard.
In February 2008, the Technical
Management Board of ISO approved
the establishment of a new project
committee (PC 242 – Energy
Management) to develop the new
ISO Management System Standard
for Energy. The project committee
consisted of 35 participating countries
and 5 observing countries. The
Associação Brasileira de Normas
Técnicas (ABNT) and the American
National Standards Institute (ANSI)
jointly served as the Secretariat. The
U.S. Council for Energy-Efficient
Manufacturing and the U.S. Department
of Energy are supporting ANSI’s role in
developing the standard.
The first ISO/PC 242 committee
convened in Washington, D.C. in
September 2008 and again in Brazil
in March 2009. The ISO 50001:2011
energy management system standard
was published on June 15, 2011.
ISO 50001:2011 REQUIREMENTS
Implementation of an energy
management standard within an
organisation requires a change in
existing institutional practices toward
energy, a process that may benefit
from technical assistance from experts
outside the organisation. Organisation
staff that are familiar with management
systems (i.e. quality, safety, and
environment) understand the dynamics
of establishing a management system
and its successful integration into the
organisation’s corporate culture. These
experts, however, typically have little
or no expertise in energy efficiency. In
contrast, industrial energy-efficiency
experts are highly specialised in
energy efficiency, but are trained and
orientated toward the identification
and execution of energy-efficiency
projects without a management system
context. The appropriate application of
energy management standards requires
significant training and skill. There is a
need to build not only internal capacity
within the organisations seeking to apply
the standard, but also external capacity
from knowledgeable experts to help
establish an effective implementation
structure. The suite of skills required to
provide the technical assistance needed
for energy management is unique, since
it combines both management systems
and energy efficiency.1
General ISO 50001:2011
requirements include:
•	 A strong commitment to continual
improvement of energy efficiency
•	 Appointment of a qualified person for
energy management
•	 Development of an energy
management plan by the organisation.
Without a plan in place, opportunities
for improvement may be known but
may not be promoted or implemented
because energy management is not
part of the organisational culture and
the normal planning process
•	 Assessing the major energy uses
in the organisation to develop a
5
baseline of energy use and set
targets for improvement
•	 Selection of energy performance
indicators and objectives helps
to shape the development and
implementation of an action plan
•	 Staff and those who work on behalf
of the organisation who need to be
aware of energy use and performance
objectives need training in both skills
and day-to-day practices to improve
energy performance
•	 The results should be regularly evaluated
and communicated to all personnel,
recognising high achievement
WHAT DOES ISO 50001:2011 COVER?
The ISO 50001:2011 standard includes
four main clauses:
1.	Scope
2.	Normative References
3.	Terms and Definitions
4.	Energy Management System
Requirements
Annex A: Guidance on the use of the
International Standard
Annex B: Correspondence between
ISO 50001:2011, ISO 9001:2008, ISO
14001:2004 and ISO 22000:2005
Clause 4 of the standard is
further broken down into seven
sub-clauses. Details of these
sub-clauses are as follows:
4.1	 General Requirements
The organisation shall:
•	 Establish, document, implement,
maintain and improve an EnMS in
accordance with the requirements of
this international standard
•	 Define and document the scope and
the boundaries of its EnMS
•	 Determine how it will meet the
requirements of this international
standard in order to achieve
continual improvement of its energy
performance and of its EnMS
4.2	 Management Responsibility
Top management shall demonstrate
its commitment and support for the
EnMS, and continually improve its
effectiveness by:
•	 Defining, establishing, implementing,
and maintaining an energy policy
•	 Appointing a management
representative and approving
the formation of an energy
management team
•	 Providing the resources needed to
establish, implement, maintain and
improve the EnMS and resulting
energy performance
•	 Identifying the scope and boundaries
to be addressed by the EnMS
•	 Communicating the importance
of energy management to those
in the organisation
•	 Ensuring that energy objectives and
targets are established
•	 Ensuring that EnPIs are appropriate to
the organisation
•	 Considering energy performance in
long-term planning
•	 Ensuring that results are measured
and reported at determined intervals
•	 Conducting management reviews
4.3	 Energy Policy
Top management shall define the energy
policy and ensure that it:
•	 Is appropriate to the nature and scale
of the organisation’s energy use and
consumption
•	 Includes a commitment to continual
improvement in energy performance
•	 Includes a commitment to ensure
the availability of information and
of necessary resources to achieve
objectives and targets
•	 Includes a commitment to comply with
applicable legal requirements and other
requirements to which the organisation
subscribes related to its energy use,
consumption, and efficiency
•	 Provides the framework for setting and
reviewing energy objectives and targets
•	 Supports the purchase of
energy-efficient products and
services, and design for energy
performance improvement
•	 Is documented and communicated
at all levels within the organisation
•	 Is regularly reviewed, and updated
as necessary
4.4	 Energy Planning
Energy planning shall:
•	 Be consistent with the energy policy
and lead to activities that continually
improve energy performance
•	 Involve a review of the organisation’s
activities which can affect energy
performance
•	 Develop, record, and maintain an
energy review. The methodology
and criteria used to develop the
energy review shall be documented.
To develop the energy review, the
organisation shall:
	 Analyse energy use and
consumption based on
measurement and other data
	 Based on the analysis of energy use
and consumption, identify the areas
of significant energy use
	 Identify, prioritise and record
opportunities for improving
energy performance
•	 Establish an energy baseline(s)
using the information in the initial
energy review
•	 Identify Energy performance
indicators (EnPIs) appropriate
for monitoring and measuring its
energy performance
•	 Establish, implement and maintain
documented energy objectives and
targets. The objectives and targets
shall be consistent with the energy
policy. Targets shall be consistent
with the objectives
6
7
THE ISO 50001:2011 ENERGY MANAGEMENT SYSTEM MODEL
PLAN
•	Policy/goals/targets
(4.3, 4.4.6)
•	Management
Commitment (4.2.1)
PLAN
•	 Energy Review (4.4.3)
• 	 Energy baseline (4.4.4)
•	 Energy Performance
Indicators (4.4.5)
DO
•	 Training (4.5.2)
•	 Communication (4.5.3)
•	 Documentation (4.5.4)
•	 Operational Control
(4.5.5)
DO
•	 Design (4.5.6)
•	 Energy purchasing
(4.5.7)
CHECK
•	 Internal audit (4.6.3)
•	Corrective/preventive
action (4.6.4)
CHECK
•	 Monitoring (4.6.1)
•	 Measurement (4.6.1)
•	 Verifying action plans
results (4.4.6)
ACT
•	 Management review (4.7)
ACT
•	 Energy performance
and EnPIs review (4.7.2)
Management TECHNICAL
ACT PLAN
CHECK DO
4.5	 Implementation and Operation
The organisation shall:
•	 Use the action plans and other outputs
resulting from the planning processs
for implementation and operation
•	 Ensure any person(s) working for,
or on its behalf related to significant
energy uses are competent on the
basis of appropriate education,
training, skills and experience
•	 Communicate internally with regard
to its energy performance and
EnMS, as appropriate for the size
of the organisation
•	 Establish, implement and maintain
procedure(s) to approve documents
for adequacy prior to issue
•	 Identify and plan those operations and
maintenance activities which are related
to its significant energy uses and that
are consistent with its energy policy,
objectives, targets and action plans
•	 Consider energy performance
improvement opportunities and
operational control in the design of
new, modified and renovated facilities,
equipment, systems and processes
•	 Establish and implement the
criteria for assessing energy use,
consumption and efficiency over
the planned or expected operating
lifetime when procuring energy using
products, equipment and services
4.6	Checking
The organisation shall:
•	 Ensure that the key characteristics of
its operations that determine energy
performance are monitored, measured
and analysed at planned intervals
•	 Define and periodically review its
measurement needs
•	 Ensure that the equipment used in
monitoring and measuring of key
characteristics provides data which is
accurate and repeatable
•	 Investigate and respond to significant
deviations in energy performance
•	 Conduct internal audits at
planned intervals
•	 Address actual and potential
nonconformities by making
corrections, and by taking corrective
action and preventive action
4.7	 Management Review
Top management shall review
the organisation’s EnMS to ensure
its continuing suitability, adequacy
and effectiveness.
8
9
IV. GLOBAL SOLUTIONS FOR
ENERGY MANAGEMENT
Organisations implementing ISO
15001 are able to identify ways to
improve efficiency and reduce waste.
An Energy Management System,
which sets objectives to reduce
energy use, inherently reduces
an organisation’s energy costs.
WHY THE ENERGY MANAGEMENT
SYSTEM STANDARD?
With energy costs and the importance
attributed to climate change having
risen over the past several years, energy
efficiency has become paramount.
According to a report by the Economist
Intelligence Unit, energy-efficiency
management is critical to businesses
because they need to be seen to be:2
•	 Keeping costs under control during
economic recession
•	 Positioning themselves and their brands
as green product providers
•	 Meeting increasingly stringent
compliance requirements
•	 Improving the environmental footprint of
their products/services
•	 Implementing stronger controls over
suppliers of environmental standards
Businesses that are wasting energy are
reducing profitability and causing avoidable
pollution, primarily through increased
carbon emissions, which contributes to
both climate change and dwindling fuel
reserves. Making businesses more energy
efficient is seen as a largely untapped
solution to addressing global warming,
energy security and fossil fuel depletion.
As pressures mount on businesses to
become more energy efficient, managing
resources effectively is proving more
essential than ever. In addition, customers
are increasingly asking for assurance
from organisations that they treat the
environment responsibly and are able to
demonstrate energy efficiency.
ISO 50001:2011 is intended to give
energy management system guidance
to companies and organisations so that
they can develop and implement energy
policies, objectives, targets and action
plans, which take into account legal
requirements and other information
relevant to energy use.
A management process is required to
proactively assess, manage, and measure
energy usage; the introduction to the
standard makes it clear that implementing
ISO 50001:2011:
“…should lead to reductions in energy
cost, greenhouse gas emissions and
other environmental impacts, through
systematic management of energy.”
Many organisations currently have limited
levels of the expertise necessary to achieve
these reductions and so need guidance on
how to do so through best practices.
Improvements in energy efficiency will
require systems and processes necessary
to improve energy performance.
Companies and organisations will need to
manage the way in which they use energy
in order to reduce GHG emissions and
other environmental impacts, as well as
reductions in energy costs and wastage.
ISO 50001:2011 provides a framework
for integrating energy efficiency into
existing industrial management systems
and enables organisations to take a
systematic approach to achieve continual
improvement of energy performance,
energy efficiency and energy conservation.
In addition, a survey done by Carbon
Trust released on March 23, 2011,
suggested that for those companies able
to provide credible evidence of improving
their environmental impact there are
considerable commercial and reputational
opportunities, not least the fact that of
those surveyed, more than 50% are more
loyal to brands that can show, at a glance,
evidence of action.
70% of people want businesses to
mandatorily disclose their carbon
emissions, and 66% of the public
question the authenticity of climate claims
made by companies. The research shows
that the majority of consumers (60%)
need third-party evidence of action from
a respected climate change body before
believing corporate claims. Just 7%
believe the word of companies on their
climate change responsibilities and actions
to reduce their impacts3
.
Reports suggest that there is a distinct
correlation between the strongest, most
successful brands, and those brands that
score highly on the categories of Corporate
Reputation, Leadership and Innovation.
Environmental responsibility is one of the
top characteristics of leading companies.
In summary, the ISO 50001:2011 EnMS
standard provides the following benefits:
•	 Strategic planning that requires
measurement, management, and
documentation for continuous
improvement for energy efficiency and
cost savings
•	 Addressing policies and procedures
based on all aspects of energy purchase
and use
•	 Demonstrating continuous
improvement in energy efficiency
•	 It creates documents that are useful for
additional energy saving projects that
are undertaken as well as for evolving
into policies
•	 Identifying key performance indicators,
unique to the company, that are tracked
to measure progress
2
Economist Intelligence Unit Report. Countdown to Copenhagen. Available at: http://graphics.eiu.com/marketing/pdf/copenhagen/Sustainability_2009.pdf
3
Carbon Trust 2011 press releases “Only 7% of the public believe company claims of action on climate change “ 21 March 2011. Available at: http://www.carbontrust.co.uk/
news/news/press-centre/2011/Pages/company-climate-change.aspx
10
* Please note that stand-alone pre-audits (gap analysis), can be carried out independently of any certification activity.
ISO 50001:2011 CERTIFICATION PROCESS
Step A
Agree
Contract
Step B
Optional
Pre-Audit
Surveillance Visits typically
at 6 to 12 month intervals
Step C
Stage 1
Audit
Step D
Stage 2
Audit
Certificate
Issue on
Completion
of Successful
Audit
Step E
Surveillance
Visits
Step F
Re-Certification
Audit
Action and Closure of Identified
Non-Conformities
Action and
Closure of
Identified
Non-Conformities Certification Cycle typically 3 years
Assessment and Certification
•	 Assisting organisations in making
better use of their existing energy-
consuming assets
•	 Offering guidance on benchmarking,
measuring, documenting, and reporting
energy performance improvements and
their projected impact on reductions in
greenhouse gas emissions
•	 Creating transparency and facilitating
communication on the management of
energy resources
•	 Promoting energy management best
practices and reinforcing good energy
management behaviours
•	 Assisting facilities in evaluating and
prioritising the implementation of new
energy efficient technologies
•	 Providing a framework for promoting
energy efficiency throughout the
supply chain
•	 Facilitating energy management
improvements in the context of
greenhouse gas emission
reduction projects
HOW DOES THE ENERGY MANAGEMENT
SYSTEM CERTIFICATION PROCESS WORK?
The ISO 50001:2011 certification process,
which is similar to ISO 14001:2004,
consists of the following six steps:
•	 Step A – You are provided with a
proposal based on the size and nature of
your organisation. You can then proceed
with the audit by accepting the proposal.
•	 Step B – You may have a ‘pre-audit’*
performed to give an indication of
the readiness of your organisation
for the audit. This stage is optional,
yet it is often found useful in
identifying any weaknesses in your
systems and in building confidence
before the formal audit.
•	 Step C – The first part of the formal
audit is the ‘Stage 1 – Readiness
Review’. This is an evaluation of the
compliance of your documented system
with the requirements of the standard
to better understand the nature of your
organisation, to plan the rest of the audit
as effectively as possible and to initially
examine key elements of the system.
You receive a report after this stage
identifying any concerns or observed
non-compliances so that you can take
immediate action if required.
•	 Step D – This is ‘Stage 2’ of the
initial audit process. The audit
includes interviews with you and
your colleagues and the examination
of records. Observation of your
working practices determines how
compliant your actual processes are
with the standard and with your own
documentation system. At the end of
this stage, you are presented with the
findings of the audit classified as either
major or minor non-conformances
along with other observations and
opportunities for improvement.
Once you have addressed the non-
conformities, a technical review of
the audit will then be conducted by an
authorised Certification Manager to
confirm the issuance of a certificate.
•	 Step E – Surveillance visits will be
scheduled at either six or twelve month
intervals depending on the contract.
During the visits, there are reviews of
the implementation of the action plan
addressing the past non-conformities
and examinations of certain mandatory
and other selected parts of the system
in line with an audit plan that you are
provided with before each visit.
•	 Step F – Shortly before the third
anniversary of the initial certification, a
routine visit will be extended to enable
a re-certification audit. Surveillance
visits will then continue, as before, on a
3-year cycle.
11
V. HOW ISO 50001:2011 RELATES TO
OTHER INTERNATIONAL STANDARDS
RELATIONSHIPS BETWEEN
ISO 50001:2011, ISO 14001:2004
AND ISO 9001:2008
ISO 50001 is based on the common
elements of the ISO management
system standards ensuring a high
level of compatibility between ISO
9001 and ISO 14001. Consequently,
organisations that already have an
ISO 9001 system or an ISO 14001
system in place can easily integrate
an ISO 50001 system into their
existing structures. ISO 9001 is
a Quality Management System
(QMS) which gives organisations
a systematic approach for meeting
customer objectives and ensuring
quality consistency. ISO 14001 is
an Environmental Management
System (EMS) which provides a
system for measuring and improving
an organisation’s environmental
impact. The relationship between ISO
50001:2011, ISO 14001:2004 and
ISO 9001:2008 are outlined in the
following chart:
12
management
commitment (P)
roles, responsibility &
authority (P)
Competence training &
awareness
Communication
Documentation (D)
Operational control
Internal audit (C)
Monitoring &
measurement (C)
Corrective & preventive
action
management review
iso 50001
energy policy
Energy review
Energy performance indicators
Energy baseline
Energy management
iso 14001
environmental policy
Environmental aspects
Emergency preparedness
Environmental management
programme
iso 9001
quality policy
Customer focus
Planning of product realisation
Customer-related processes
Control of nonconforming
Design
Procurement
Objectives and targets
Legal requirements
Management commitment
Roles, responsibility & authority
Competence, training & awareness
Communication
Operational control
Monitoring & measurement
Documentation
Internal audit
Corrective & preventive action
Management review
Within the scope of ISO 14001 EMS
it is believed many organisations
can effectively deal with energy
performance. To support this position, it
is important to clarify who the standard
is ideally intended for; and to interpret
what differentiates ISO 50001 from
ISO 14001. On comparing ISO 50001,
ISO 14001 and ISO 9001, there are
many similarities but also differences in
approach and degrees of prescription, as
shown in the chart on the facing page.
OTHER APPROACHES TO SUPPORTING
THE GREEN ECONOMY
Climate change is one of the greatest
challenges to the future of the planet.
International, regional, national, and
local initiatives are being developed
and implemented to limit levels of GHG
emissions into the atmosphere. GHG
initiatives rely on the assessment,
monitoring, reporting and verification of
GHG emissions and removals.
ISO 14064 Greenhouse Gases
— Part 1 and Part 2
ISO 14064-1: details principles and
requirements for designing, developing,
managing and reporting organisation-
or company-level GHG inventories. It
includes requirements for determining
GHG emission boundaries, quantifying
an organisation’s GHG emissions and
removals, and identifying specific
company actions or activities aimed at
improving GHG management.
ISO 14064-2: focuses on GHG projects
or project-based activities specifically
designed to reduce GHG emissions
or increase GHG removals. It includes
principles and requirements for
determining project baseline scenarios
and for monitoring, quantifying and
reporting project performance relative to
the baseline scenario and provides the
basis for GHG projects to be validated
and verified.
ISO/DTS 14067.2 Carbon
Footprint of Products
Throughout the lifecycle of a product (ie
cradle-to-grave) GHGs are a concern.
From raw material acquisition to
production, product use or product
end-of-life treatment GHG emissions are
produced. ISO 14067 details principles,
requirements and guidelines for the
quantification and communication of
the carbon footprint of products (CFPs).
These are based on GHG emissions and
removals over the life cycle of a product,
including both goods and services.
The communication of CFPs is based
on a CFPs report in order to provide
stakeholders with an accurate, relevant
and fair representation of CFPs.
This international standard is based
on the ISO 14020 series, ISO 14040
series and ISO 14064-1. It aims to set
more specific requirements for the
quantification and communication of
CFPs. Specific requirements apply
where the information on CFPs is
intended to be publicly available. ISO/
DTS 14067.2 was published on May 7,
2013, for consultation and is expected to
be finalised for publication in April 2014,
according to ISO.
Leadership in Energy and
Environmental design (LEED)
Green building is the practice of
increasing the efficiency with which all
buildings use resources: energy, water,
materials, etc. Green building is the
term for building with efficient practices
to reduce the impacts on human
health and the environment. These
practices may include improved design,
construction, operation, maintenance,
and removal: in other words, the
complete life cycle of buildings.
The Leadership in Energy and
Environmental Design (LEED) Green
Building Rating System is a third-party
certification programme, which is
globally accepted as a benchmark for the
design, construction and operation of
high performance and environmentally-
friendly buildings. Green buildings
consume on average 40-50% less
energy and 20-30% less water than a
conventional building. However, there
is an associated increased cost of about
5-8% with green buildings. This cost is
recoupable over a period of 3-5 years.
LEED is an internationally recognised
mark of excellence and provides building
owners and operators with a framework
for identifying, implementing, and
measuring green building design
including construction, operations and
maintenance solutions. LEED Rating
Systems are developed through an
open, consensus-based process led by
LEED committees according to the US
Green Building Council (USBGC).
If adopted, ISO 50001 Energy
Management Systems could help to
certify green building at an earlier stage
(e.g. the operational stage) and benefit
the LEED programme by increasing
its uptake. When organisations
implement an EnMS they need to have
in place monitoring and measurement
results that meet ISO 50001 clause
4.6.1: ‘Monitoring, Measurement
and Analysis’. This section is a key
component of LEED requirements.
When ISO 50001 is implemented
in new developments at the design
stage, it allows building owners to
understand the benefits of meeting
the requirements of ISO 50001. It also
makes it easier to adopt ISO 50001 in
the operation stage.
ISO 50001 looks at an
organisation’s energy performance
in detail and concludes with
specific requirements that lead to
better energy performance
13
Key Elements ISO 50001:2011 ISO 14001: 2004 ISO 9001: 2008
Policy The organisation’s enhanced energy efficiency
(usually with cost reductions too), combined
with relevant law and regulation requirements
will be the main concern of the energy policy.
The organisation’s significant
environmental aspects
together with applicable legal
and regulatory requirements
are the main concern of the
environmental policy.
Meeting customers’
expectations is the main
concern of the quality policy.
Planning To develop an energy profile, identify significant
energy uses, define an energy baseline and
establish energy performance indicators.
Identify applicable laws and regulations, and then
establish objectives, targets and action plans.
To identify environmental
aspects and relevant laws
and regulations requirements.
Establish environmental
objectives, targets and
programmes.
It requires quality objectives
definition and quality
management system
planning.
Baseline The establishment of an organisation’s energy
baseline is a fundamental element of the EnMS,
since ‘Changes in energy performance shall be
measured against the energy baseline.’
No specific requirement
beyond continual
improvement.
No specific requirement
beyond continual
improvement.
Objectives
& Targets
Energy objectives and targets are primarily
‘internal management objectives’ mixed
with ‘external requirements’ where laws and
regulations may apply.
Environmental objectives and
targets are either related to
an organisation’s significant
environmental impacts
or to external mandatory
requirements set mainly by
relevant laws and regulations.
Most of the quality objectives
are ‘management objectives’
such as the ‘conformity rate’.
They are usually ‘internal
control requirements’ and
determined mainly by the
organisation itself.
Resource
Allocation
Human resources competence, equipment
and facilities are equally important in affecting
the achievement of energy targets. In industry,
energy efficiency is in many instances more
related to operational practices than to the
energy performance of individual equipment.
Equipment and facilities have
a direct and important effect
on the achievement of
environmental targets.
The MS performance does not
rely solely on equipment and
facilities. The requirements
regarding human resources
are very important.
Design Design is part of ISO 50001 Implementation
& Operation: ‘… consider energy performance
improvement opportunities and operational
control in the design of new, modified and
renovated facilities, equipment, systems and
processes that can have a significant impact on
its energy performance.’
Design control is not included
as a separate clause. It is
considered in a more indirect
way on Environmental Aspects
identification.
Product design and
development is a critical
process.
Purchasing It includes separate clauses for the purchasing
of energy services, products, equipment and
energy purchasing.
Purchase control is not
included as a separate clause,
but is mentioned under
operational control.
It focuses mainly on
materials, components and
services.
Monitoring &
Measurement
Monitoring, measurement and analysis of
the key characteristics of an organisation’s
operations that determine energy performance.
Key characteristics also include actions plan
effectiveness in achieving objectives and
targets.
Monitoring and measurement
of the key ‘process
characteristics’ related
to identified significant
environmental impacts,
and consequently, objectives
and targets.
Monitoring and
measurement of the product
is very important, including
raw material.
Reference: Li Tienan, ISO regional seminar on Energy Management and ISO 50001: “How ISO 50001 relates to ISO 9001 and ISO 14001, Bangkok, Thailand, 2010.”
14
15
VI. INTEGRATING ENVIRONMENTAL
AND ENERGY MANAGEMENT SYSTEMS:
PROCESS AND BENEFITS
WHY ISO 50001 IS THE NEXT
LOGICAL STEP FOR AN ISO 14001
CERTIFIED ORGANISATION?
Many organisations that hold an ISO
14001 certificate follow it with an
ISO 50001 standard. This is because
the ISO 14001 provides a broad
certification covering a variety of different
environmental criteria (air, water, waste,
energy etc.) while the ISO 50001 focuses
on the area of energy efficiency alone.
Within the ISO 14001, energy is just
one of the environmental criteria that
organisations need to identify and
address as part of an Environmental
Management System (EMS). In this, all
environmental factors are assessed in
the same way. The ISO 50001 instead
looks at an organisation’s energy
performance and its environmental
impacts in detail and concludes with
specific requirements that lead to better
energy performance. These quantitative
requirements are fundamental to
the effective implementation of an
Energy Management System (EnMS).
To achieve ISO 50001, each variable
affecting an organisation’s EnMS needs
to be fully understood in terms of its
implications on energy performance.
This is a greater depth of understanding
than is required within the ISO 14001.
Additionally, ISO 50001 determines
what information an organisation should
be monitoring and measuring as part
of its EnMS, setting a minimum of five
key characteristics as the minimum
requirements. The ISO 50001 is
specific in defining end goals for the
processes associated with achieving
these requirements. The ISO 14001
does not require as much detail and
gives an organisation a greater degree
of freedom in terms of measurements,
depending on its environmental
objectives. The result for an
organisation introducing the ISO 5001
is that is able to effectively achieve
energy efficiency improvements.
STEPS TO INTEGRATE THE
MANAGEMENT SYSTEMS
In Environmental Management Systems
and Energy Management Systems
there are certain common elements
that can be managed in an integrated
way. Uniting these systems benefits an
organisation in terms of cost savings
and efficiencies. The integration of
the two systems needs to be planned
and implemented in a structured way,
following a five-step process:
Step 1 – Gather the right team
Engage technical staff with
environmental and energy management
knowledge to support the management
system implementation team. These
individuals could be facilities managers,
logistics managers, fleet managers,
procurement and purchasing managers,
or come from other associated
technical backgrounds.
Step 2 – Gap analysis audit
Determine the boundaries and
applicability of the two management
systems and establish the scope. It is
recommended that the scope for the
integrated management system reflects
the widest requirements of the individual
systems at the operational level.
A gap analysis audit allows identifies
the processes needed for the
implementation, operation and
maintenance of the integrated
management system throughout the
organisation. This forms the basis for
project planning. As part of this, the ISO
50001 requirements that are already
implemented should be identified. This
could also include requirements that are
specific to the ISO 50001, such as an
energy review or energy performance
indicator, which an organisation may
already have established. The gap audit
helps the organisation to have a whole
picture of what needs to be addressed
to meet the complete requirements
of the standard. A competent auditor
should perform the audit to ensure all
requirements are correctly assessed.
Step 3 – Implement the integrated
management system
•	 Identify the processes needed for
the implementation, operation and
maintenance of the EnMS and EMS
throughout the organisation
•	 Establish, implement and maintain
a process to determine any legal
requirements related to the
organisation’s activities, products and
services that are relevant to the scope
of the EnMS and EMS
•	 Determine the sequence and
interaction of these processes and
whether the integration of these
processes is possible
•	 Determine the criteria and methods
needed to ensure that the operation and
control of these processes is effective
•	 Ensure the availability of resources
and information necessary
to support the operation and
monitoring of these processes
•	 Monitor, measure and analyse these
processes. Implement actions as
needed to achieve the planned results
and continual improvement of the
organisation’s overall performance
All non-conformities identified
during the gap analysis audit should
also be addressed.
Step 4 – Internal audit and
management review
Perform an internal audits related to the
ISO 50001 and 14001 requirements.
These can be done at the same time as
long as the auditors have the required
competences to achieve both. Similarly,
the management review for ISO 50001
uses some of the same information
as the review for ISO 14001 and the
outcome of these two reviews together
can be used to close the management
system loop.
16
Integrating an organisation’s EMS
and EnMS reduces duplication,
improves overall efficiencies and
further boosts cost savings.
Step 5 – Certification audit
Certification audits for both the ISO
50001 and the ISO 14001 can be
performed at the same time. The
number of days required for a joint audit
is less than if the audits are performed
separately. The more integrated the
two management systems, the more
effective the use of audit time and
therefore the less the time requirement.
Individual certificates for each standard
are still received.
BENEFITS OF INTEGRATING THE
MANAGEMENT SYSTEMS
Integrating an organisation’s EMS
and EnMS means that the common
requirements of the two management
systems can be consolidated. Overall
objectives can then be prioritised based
on return on investment. This leads the
organisation to develop efficient means
to manage all the necessary resources,
ultimately saving time and money.
By bringing the implementation of the
management systems together the
committees responsible for putting the
systems in place can also benefit from
shared learning experiences. For any
organisation that already has an EMS
and is introducing and integrating an
EnMS, many procedures would already
exist that could be extended to cover the
additional requirements of the integrated
management system. This is likely to
include an information system, which
is used for collecting and disseminating
information related to the requirements
of the standards, as well as trained
technical staff, such as internal auditors.
Any organisation already certified
against the ISO 14001 would be able
to simply integrate the matching
requirements of the ISO 50001,
such as the Record Keeping System,
Document Management System, and
Training and Awareness Activities into
those that already exist. Obviously this
does not apply to ISO 50001 specific
requirements such as the criteria for
identifying Significant Energy Use
and the development of an Energy
Management Action Plan.
Overall, the benefits achieved by
integrating the EMS and EnMS
management systems are numerous
and include:
•	 An improved business focus
•	 A more holistic approach to managing
business risks
•	 Less conflict between individual
management systems
•	 Reduced duplication and bureaucracy
•	 More effective and efficient audits
both internally and externally
•	 Easier facilitation of the requirements
of any new management system
For each new system that is integrated,
procedures and resources can generally
be expanded to meet the additional
requirements. By following this process,
as opposed to separately introducing a
new system, organisations are able to
prevent duplication, improve efficiency
and benefit from cost savings.
17
VII. CASE STUDY – AU OPTRONICS
BENEFITS FROM IMPLEMENTING
ISO 50001:2011
AU Optronics Corp. (AUO)
AUO is the first manufacturer in the
world to have gained ISO 50001:2011
certification for its Gen 8.5 Fab in
Central Taiwan Science Park. The
company has consistently pushed its
efforts in energy-saving practices and
has received global recognition: AUO
received the world’s first LEED Platinum
Certification from USGBC.
The company viewed achieving
ISO 50001:2011 as the ‘next global
highlight’ (following ISO 9001:2008,
the quality management system, and
ISO 14001:2004, the environmental
management system) in order to
set AUO apart from its competitors
worldwide. SGS was on hand to help
AUO attain ISO 50001 and implement
the certification to front-end TFT and
back-end module facilities.
The goal for AUO is to achieve 25%
energy savings in 2015, with 2010 as
the base year. They are also searching
opportunities that relate to improving
their energy performance through
management procedures. SGS’
assistance in incorporating management
system changes has helped AUO
reduce energy use by 10% at AUO’s
Gen 8.5 Fab in Central Taiwan Science
Park in 2011. More than 30 energy
performance indicators (EnIPs) were
set for plants and divisions to monitor
energy performance on a month-by-
month basis. An estimated 55 million
kWh of electricity will be saved, and 35
thousand tonnes of carbon emissions
reduced: the equivalent effect of the
afforestation of New York Central Park
nine times over. The projected energy
saving objective was twice as high as
the group’s annual objective.
With the success they have already
experienced, AUO plans to expand the
ISO 50001:2011 energy management
system across all its operations in the
future. Plans are also in place at AUO
for energy performance assessment to
take place during procurement, to further
enhance value chain energy management.
Adopting ISO 50001 is key to
achieving 25% energy savings
between 2010 and 2015.
18
ABOUT THE AUTHOR
Eric G.T. Huang
Global Product Manager,
Energy/Sustainability, SGS
Eric G.T. Huang has 24 years
environmental engineering and
management experience in audit,
consulting, engineering and operation,
specialising in energy and climate
change. He is now responsible for the
technical development of SGS’ Energy
Management Systems certification
services, including ISO 50001:2011
and other sustainability services. Eric
holds a Master’s degree in Civil and
Environmental Engineer from Rutgers
University, US.
ABOUT SGS
SGS is the world’s leading inspection,
verification, testing and certification
company. SGS is recognised as the
global benchmark for quality and
integrity. With more than 75 000
employees, SGS operates a network
of over 1 500 offices and laboratories
around the world.
Enhancing processes, systems and skills
is fundamental to your ongoing success
and sustained growth. We enable you to
continuously improve, transforming your
services and value chain by increasing
performance, managing risks, better
meeting stakeholder requirements
and managing sustainability. With a
global presence, we have a history of
successfully executing large-scale,
complex international projects.
Our people speak the language,
understand the culture of the local
market and operate globally in a
consistent, reliable and effective
manner. SGS has worldwide expertise
in supporting energy efficiency and
innovation. Our global presence and
knowledge of local legislations and
regulations gives you the peace of mind
of knowing that you are minimising
your environmental impact and
improving your energy consumption.
We are the global leader in ISO 14001
Environmental Management Systems
certification and greenhouse gas
verification and an international front
runner in Energy Management solutions.
For more information, visit
www.sgs.com/energy or
contact energy@sgs.com
VIII. Conclusion
ISO 50001:2011 combines the benefit of a business management tool for energy management and business processes, with the
ability to meet growing global customer requirements for reduced GHG emissions. Certification can provide generic assistance
to an organisation for establishing, implementing or improving an EnMS. Global application of an energy management standard
contributes to a more efficient use of available energy sources, enhanced competitiveness and a positive impact on climate
change. Certifying your EnMS helps your organisation to develop and improve performance and reduce costs.
COPYRIGHT NOTICE
The information contained in this document represents the current view of SGS SA on the issues discussed as of the date of publication. Because SGS must respond to
changing market conditions, it should not be interpreted to be a commitment on the part of SGS, and SGS cannot guarantee the accuracy of any information presented after
the date of publication.
This White Paper is for informational purposes only. SGS makes no warranties, express, implied or statutory, as to the information in this document.
Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced,
stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose,
without the express written permission of SGS.
SGS may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly
provided in any written license agreement from SGS, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other
intellectual property.
ANY REPRODUCTION, ADAPTATION OR TRANSLATION OF THIS DOCUMENT WITHOUT PRIOR WRITTEN PERMISSION IS PROHIBITED, EXCEPT AS ALLOWED UNDER THE
COPYRIGHT LAWS. © SGS SA 2011 – REVISED IN 2013 – ALL RIGHTS RESERVED.
WWW.SGS.COM
©SGSGroupManagementSA–2011–Revisedin2013–Allrightsreserved–SGSisaregisteredtrademarkofSGSGroupManagementSA

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SGS Energy Management White Paper May 2013 Update

  • 1. GENERATING COST SAVINGS THROUGH EFFECTIVE ENERGY MANAGEMENT A DISCUSSION ABOUT THE CHALLENGES AND OPPORTUNITIES ASSOCIATED WITH ENERGY SAVINGS IMPROVEMENTS MAY 2013 AUTHOR Eric G.T. Huang Global Product Manager, Energy/Sustainability, SGS
  • 2. 1 I. EXECUTIVE SUMMARY CONTENTS ABSTRACT The purpose of this document is to provide an introduction to the ISO 50001:2011 Energy Management System (EnMS) certification requirements. This document is not intended to be a full explanation of the certification standards and related requirements or of its implementation. Rather, it aims to promote understanding of the standard and to enable organisations to establish the systems and processes necessary to reduce energy costs, boost efficiency, and enhance competitiveness. I. EXECUTIVE SUMMARY 1 II. GLOBAL ENERGY MANAGEMENT 2 III. ENERGY MANAGEMENT SYSTEMS STANDARDS 5 IV. GLOBAL SOLUTIONS FOR ENERGY MANAGEMENT 9 V. HOW ISO 50001:2011 RELATES TO OTHER INTERNATIONAL STANDARDS 11 VI. INTEGRATING ENVIRONMENTAL AND ENERGY MANAGEMENT SYSTEMS: PROCESS AND BENEFITS 15 VII. CASE STUDY – AU OPTRONICS BENEFITS FROM IMPLEMENTING ISO 50001 17 VIII. CONCLUSION 18 “Energy efficiency is the most promising means to reduce greenhouse gases in the short term,” said Yvo de Boer, Former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC). Thomas L. Friedman, the foreign affairs columnist for The New York Times and a three-time Pulitzer Prize winner in his no. 1 bestseller “Hot, Flat, and Crowded” stated “We cannot continue the business as usual path. We need a green revolution and we need to focus on ET – Energy Technology – based on renewable energy production and energy efficiency.” This is the beginning of a new era – the “Energy Climate Era”. Energy conservation technology and facilities/equipment are only part of the approach to improve energy efficiency. Systematic management and the behaviour approach have become the core efforts to improve energy efficiency today. The purpose of ISO 50001:2011, the EnMS standard discussed in this paper, is to enable organisations to establish the systems and processes necessary to improve energy performance and increase cost savings. They are based on the continual improvement and Plan- Do-Check-Act approaches utilised in the ISO 9001 and ISO 14001 management systems standards to provide compatibility and integration opportunities. Implementing these standards should lead to reductions in energy costs with a positive effect on an organisation’s bottom line, while minimising greenhouse gas emissions and the overall negative impact on the environment.
  • 3. 2 II. GLOBAL ENERGY MANAGEMENT THE CHALLENGE OF THE ‘ENERGY-CLIMATE ERA’ What are the greatest problems facing humanity today? As far back as 2003, the Nobel Laureate Richard E. Smalley outlined what he said would be Humanity’s ‘Top Ten Problems for the next 50 years’ he placed energy consumption first on the list in response to the projection that world population would increase from 6.5 billion to 8-10 billion by 2050. In recent years, many people have listed energy as a growing problem. Certainly many of our environmental problems today arise from the types of energy we use, and the increasing burning of fossil fuels will accelerate climate change. The global climate system is warming, with an increase in the frequency and intensity of extreme weather and climate events such as heat waves, cold spells, heavy rainfall, droughts and tropical cyclones, and a rise in the sea level. It was confirmed by the United Nations Intergovernmental Panel on Climate Change (IPCC) that the warming of the climate system is unequivocal. Eleven of the twelve years between 1995 and 2006 ranked among the twelve warmest years since 1850. The temperature increase is widespread over the world, with both rising sea level and decreases in snow and ice extent consistent with warming. Current energy and CO2 trends run directly counter to the repeated warnings sent by the IPCC, which concludes that reductions of at least 50% in global CO2 emissions compared to 2000 levels will need to be achieved by 2050 to limit the long-term global average temperature rise to between 2.0 degrees C and 2.4 degrees C. Recent studies suggest that climate change is occurring even faster than previously expected and that even the ‘50% by 2050’ goal may be inadequate to prevent dangerous climate change. However, the world needs ever increasing energy supplies to sustain economic growth and development. But energy resources are under pressure and CO2 emissions from today’s energy usage already threaten our climate. What options do we have for switching to a cleaner and more efficient energy future? How much will it cost? And what policies do we need? According to the International Energy Agency (IEA) ‘Energy Technology Perspectives (ETP) 2010’ report, the next decade is critical. If emissions do not peak by around 2020 and decline steadily thereafter, achieving the needed 50% reduction by 2050 will become much more costly. Following this earlier report, the IEA released its ETP 2012 2°C Scenario (2DS) exploring the technological energy efficiency and balanced energy system options that are needed to realise a sustainable future. Central to this is the use of renewable energy sources and ensuring lower emissions. According to the 2DS, energy savings and the use of alternative energy sources could save countries a total of 450 exajoules (EJ) in fossil fuel purchases by 2020. This is comparable to the last six years of total fossil fuel imports among all OECD countries. By 2050, the cumulative fossil fuel savings potential is said to be almost 9 000 EJ – equivalent to more than 15 years of current world energy primary demand. The 2DS demonstrates how energy efficiency and accelerated deployment of low-carbon technologies could help cut government expenditure, reduce energy import dependency and lower emissions. ETP 2012 explains why energy efficiency must be driven to achieve its potential. Being energy efficient will help cut emissions and reduce the energy intensity (measured as energy input per unit of gross domestic product [GDP]) of the global economy by two-thirds by 2050. In this regard, information and energy management are proven and effective ways to encourage energy efficiency measures in industry. Thomas L. Friedman, the foreign affairs columnist for The New York Times, and a three-time Pulitzer Prize winner, explains in his number one bestseller ‘Hot, Flat, and Crowded’ a new era through his illuminating account of recent events: ‘the Energy-Climate Era.’ He shows how 911, Hurricane Katrina, and the flattening of the world by the Internet have combined to bring climate and energy issues to Main Street. ‘We can no longer expect to enjoy peace and security, economic growth, and human rights if we continue to ignore the key problems of the Energy-Climate Era: energy supply and demand, petro- dictatorship, climate change, energy poverty, and biodiversity loss. How we handle these five problems will determine whether we have peace and security, economic growth, and human rights in the coming years’. As Friedman defines, the era concerns itself with the energy and climate problems, both of which are widely debated and needing solutions; but they have not gone very far, the much-touted ‘green revolution’ has hardly begun.
  • 4. 3 A MAJOR OPPORTUNITY ‘Energy efficiency is the most promising means to reduce greenhouse gases in the short term,’ said Yvo de Boer, Former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC). Thomas L. Friedman also stated in his book: ‘We cannot continue the business as usual path. We need a green revolution and we need to focus on ET – Energy Technology - based on renewable energy production and energy efficiency.’ This is the beginning of a new era – the Energy Climate Era. Increased energy efficiency will become the most important ‘momentum’ of the future. Low-cost options for reducing actual consumption – many of which are already available – offer the greatest potential for cutting CO2 emissions over the period to 2050. Former US Energy Secretary Steven Chu also indicated: ‘In fact energy efficiency is not just low-hanging fruit; it is fruit that is lying on the ground. And energy efficiency means money back in your pocket because you pay less on your energy bills.’ Energy conservation technology and facilities or equipment are only part of the approach to improve energy efficiency. Most energy efficiency in industry is achieved through changes in how energy is managed in a facility, rather than through the installation of new technologies. Today, systematic management and the behaviour approach have become the core efforts to improve energy efficiency and save costs. An energy management standard provides a method for integrating energy efficiency into existing industrial or commercial management systems for continuous improvement. Any improvements in energy efficiencies would result in significant reductions in carbon emissions and increased cost savings for the organisation. The key question for energy management practitioners is how to provide the best case for successful energy management within their organisation, one that will achieve the desired buy-in at top management level, and can be implemented as a successful management system. The purpose of an energy management standard is to provide an organisational framework for industrial facilities to integrate energy efficiency into their management practices, including fine-tuning production processes and improving the energy efficiency of industrial systems. Energy management seeks to apply to energy use the same culture of continual improvement that has been successfully used by industrial firms to improve quality and safety practices. An energy management standard is needed to influence how energy is managed in an industrial facility, thus realising immediate energy use reductions through changes in operational practices, as well as creating a favourable environment for adoption of more capital-intensive energy-efficiency measures and technologies.1 Efficient energy management requires the identification of where energy is used, where it is wasted and where any energy saving measures will have most effect. ISO 50001:2011 provides a structured approach that incorporates energy management into organisational culture, resulting in sustained energy savings and continual improvements in energy performance over time. This helps to justify initial investments into energy projects as well as to deliver a return on investment. The key feature of a successful EnMS is that it is owned and fully integrated as an embedded management process within an organisation, energy management implications are considered at all stages of the development process of new projects, and that these implications are part of any change control process. Without a structured approach, there is no guarantee that energy savings will be sustained or that return-on-investment will be maximised. A change in the organisational culture is needed in order to realise industrial energy efficiency potential. An EnMS standard can provide the supportive organisational framework necessary to move beyond an energy saving project approach to an energy efficiency approach that routinely and methodically seeks out opportunities to increase energy efficiency and achieve cost savings, no matter how large or small. 1 McKane, et al. Thinking Globally: How ISO 50001 – Energy Management can make industrial energy efficiency standard practice. Available at: http://industrial-energy.lbl.gov/drupal.files/industrial-energy/ISO%2050001-Energy%20Management.pdf
  • 5. 4
  • 6. III. ENERGY MANAGEMENT SYSTEMS STANDARDS ENERGY MANAGEMENT SYSTEM STANDARD – ISO 50001:2011 Realising the importance of energy management, ISO 50001:2011 was developed as the International Standard for energy management by the International Organization for Standardization (ISO) in 2008. The ISO 50001:2011 energy management system standard was published on June 15, 2011. It is anticipated to affect up to 60 percent of the world’s energy consumption and has the potential to become a global trade catalyst for industrial energy efficiency in the same way that ISO 9001 has for quality. This standard is expected to achieve major, long-term increases in energy efficiency (20% or more) in industrial, commercial, and institutional facilities and to reduce greenhouse gas (GHG) emissions worldwide. ISO 50001:2011 specifies requirements for an organisation to establish, implement, maintain and improve an energy management system, which enables that organisation to take a systematic approach in order to achieve continual improvement of energy performance, including energy efficiency, energy use and consumption. It specifies requirements applicable to energy use and consumption, including measurement, documentation and reporting, design and procurement practices for equipment, systems, processes, and personnel that contribute to energy performance. Implementation of this standard should lead to reductions in energy costs, greenhouse gas emissions and other environmental impacts, through the systematic management of energy. ISO 50001:2011 establishes an international framework for industrial, commercial or institutional facilities, or entire companies, to manage their energy, including procurement and use. It is applicable to all types and sizes of organisations irrespective of geographical, cultural or social conditions. Conformance with ISO 50001:2011 demonstrates that a plant or company has a sustainable EnMS in place, has completed a baseline of energy use, and is committed to continuously improving its energy performance, while reducing costs. The framework of ISO 50001:2011 encompasses a combination of technical and strategic management aspects, which are expected to give this standard wide acceptability. The standard is based on the continual improvement and PDCA approaches utilised in ISO 9001 and ISO 14001 to provide compatibility and integration opportunities. DEVELOPING ISO 50001:2011 The U.N. Industrial Development Organization (UNIDO) was one of the earliest entities to recognise the industry need to develop an effective response to climate change and to the proliferation of national energy management standards. In March 2007, UNIDO hosted a meeting of experts which led to the submission of a formal request to the ISO Central Secretariat to consider undertaking work on an international energy management standard. In February 2008, the Technical Management Board of ISO approved the establishment of a new project committee (PC 242 – Energy Management) to develop the new ISO Management System Standard for Energy. The project committee consisted of 35 participating countries and 5 observing countries. The Associação Brasileira de Normas Técnicas (ABNT) and the American National Standards Institute (ANSI) jointly served as the Secretariat. The U.S. Council for Energy-Efficient Manufacturing and the U.S. Department of Energy are supporting ANSI’s role in developing the standard. The first ISO/PC 242 committee convened in Washington, D.C. in September 2008 and again in Brazil in March 2009. The ISO 50001:2011 energy management system standard was published on June 15, 2011. ISO 50001:2011 REQUIREMENTS Implementation of an energy management standard within an organisation requires a change in existing institutional practices toward energy, a process that may benefit from technical assistance from experts outside the organisation. Organisation staff that are familiar with management systems (i.e. quality, safety, and environment) understand the dynamics of establishing a management system and its successful integration into the organisation’s corporate culture. These experts, however, typically have little or no expertise in energy efficiency. In contrast, industrial energy-efficiency experts are highly specialised in energy efficiency, but are trained and orientated toward the identification and execution of energy-efficiency projects without a management system context. The appropriate application of energy management standards requires significant training and skill. There is a need to build not only internal capacity within the organisations seeking to apply the standard, but also external capacity from knowledgeable experts to help establish an effective implementation structure. The suite of skills required to provide the technical assistance needed for energy management is unique, since it combines both management systems and energy efficiency.1 General ISO 50001:2011 requirements include: • A strong commitment to continual improvement of energy efficiency • Appointment of a qualified person for energy management • Development of an energy management plan by the organisation. Without a plan in place, opportunities for improvement may be known but may not be promoted or implemented because energy management is not part of the organisational culture and the normal planning process • Assessing the major energy uses in the organisation to develop a 5
  • 7. baseline of energy use and set targets for improvement • Selection of energy performance indicators and objectives helps to shape the development and implementation of an action plan • Staff and those who work on behalf of the organisation who need to be aware of energy use and performance objectives need training in both skills and day-to-day practices to improve energy performance • The results should be regularly evaluated and communicated to all personnel, recognising high achievement WHAT DOES ISO 50001:2011 COVER? The ISO 50001:2011 standard includes four main clauses: 1. Scope 2. Normative References 3. Terms and Definitions 4. Energy Management System Requirements Annex A: Guidance on the use of the International Standard Annex B: Correspondence between ISO 50001:2011, ISO 9001:2008, ISO 14001:2004 and ISO 22000:2005 Clause 4 of the standard is further broken down into seven sub-clauses. Details of these sub-clauses are as follows: 4.1 General Requirements The organisation shall: • Establish, document, implement, maintain and improve an EnMS in accordance with the requirements of this international standard • Define and document the scope and the boundaries of its EnMS • Determine how it will meet the requirements of this international standard in order to achieve continual improvement of its energy performance and of its EnMS 4.2 Management Responsibility Top management shall demonstrate its commitment and support for the EnMS, and continually improve its effectiveness by: • Defining, establishing, implementing, and maintaining an energy policy • Appointing a management representative and approving the formation of an energy management team • Providing the resources needed to establish, implement, maintain and improve the EnMS and resulting energy performance • Identifying the scope and boundaries to be addressed by the EnMS • Communicating the importance of energy management to those in the organisation • Ensuring that energy objectives and targets are established • Ensuring that EnPIs are appropriate to the organisation • Considering energy performance in long-term planning • Ensuring that results are measured and reported at determined intervals • Conducting management reviews 4.3 Energy Policy Top management shall define the energy policy and ensure that it: • Is appropriate to the nature and scale of the organisation’s energy use and consumption • Includes a commitment to continual improvement in energy performance • Includes a commitment to ensure the availability of information and of necessary resources to achieve objectives and targets • Includes a commitment to comply with applicable legal requirements and other requirements to which the organisation subscribes related to its energy use, consumption, and efficiency • Provides the framework for setting and reviewing energy objectives and targets • Supports the purchase of energy-efficient products and services, and design for energy performance improvement • Is documented and communicated at all levels within the organisation • Is regularly reviewed, and updated as necessary 4.4 Energy Planning Energy planning shall: • Be consistent with the energy policy and lead to activities that continually improve energy performance • Involve a review of the organisation’s activities which can affect energy performance • Develop, record, and maintain an energy review. The methodology and criteria used to develop the energy review shall be documented. To develop the energy review, the organisation shall: Analyse energy use and consumption based on measurement and other data Based on the analysis of energy use and consumption, identify the areas of significant energy use Identify, prioritise and record opportunities for improving energy performance • Establish an energy baseline(s) using the information in the initial energy review • Identify Energy performance indicators (EnPIs) appropriate for monitoring and measuring its energy performance • Establish, implement and maintain documented energy objectives and targets. The objectives and targets shall be consistent with the energy policy. Targets shall be consistent with the objectives 6
  • 8. 7 THE ISO 50001:2011 ENERGY MANAGEMENT SYSTEM MODEL PLAN • Policy/goals/targets (4.3, 4.4.6) • Management Commitment (4.2.1) PLAN • Energy Review (4.4.3) • Energy baseline (4.4.4) • Energy Performance Indicators (4.4.5) DO • Training (4.5.2) • Communication (4.5.3) • Documentation (4.5.4) • Operational Control (4.5.5) DO • Design (4.5.6) • Energy purchasing (4.5.7) CHECK • Internal audit (4.6.3) • Corrective/preventive action (4.6.4) CHECK • Monitoring (4.6.1) • Measurement (4.6.1) • Verifying action plans results (4.4.6) ACT • Management review (4.7) ACT • Energy performance and EnPIs review (4.7.2) Management TECHNICAL ACT PLAN CHECK DO 4.5 Implementation and Operation The organisation shall: • Use the action plans and other outputs resulting from the planning processs for implementation and operation • Ensure any person(s) working for, or on its behalf related to significant energy uses are competent on the basis of appropriate education, training, skills and experience • Communicate internally with regard to its energy performance and EnMS, as appropriate for the size of the organisation • Establish, implement and maintain procedure(s) to approve documents for adequacy prior to issue • Identify and plan those operations and maintenance activities which are related to its significant energy uses and that are consistent with its energy policy, objectives, targets and action plans • Consider energy performance improvement opportunities and operational control in the design of new, modified and renovated facilities, equipment, systems and processes • Establish and implement the criteria for assessing energy use, consumption and efficiency over the planned or expected operating lifetime when procuring energy using products, equipment and services 4.6 Checking The organisation shall: • Ensure that the key characteristics of its operations that determine energy performance are monitored, measured and analysed at planned intervals • Define and periodically review its measurement needs • Ensure that the equipment used in monitoring and measuring of key characteristics provides data which is accurate and repeatable • Investigate and respond to significant deviations in energy performance • Conduct internal audits at planned intervals • Address actual and potential nonconformities by making corrections, and by taking corrective action and preventive action 4.7 Management Review Top management shall review the organisation’s EnMS to ensure its continuing suitability, adequacy and effectiveness.
  • 9. 8
  • 10. 9 IV. GLOBAL SOLUTIONS FOR ENERGY MANAGEMENT Organisations implementing ISO 15001 are able to identify ways to improve efficiency and reduce waste. An Energy Management System, which sets objectives to reduce energy use, inherently reduces an organisation’s energy costs. WHY THE ENERGY MANAGEMENT SYSTEM STANDARD? With energy costs and the importance attributed to climate change having risen over the past several years, energy efficiency has become paramount. According to a report by the Economist Intelligence Unit, energy-efficiency management is critical to businesses because they need to be seen to be:2 • Keeping costs under control during economic recession • Positioning themselves and their brands as green product providers • Meeting increasingly stringent compliance requirements • Improving the environmental footprint of their products/services • Implementing stronger controls over suppliers of environmental standards Businesses that are wasting energy are reducing profitability and causing avoidable pollution, primarily through increased carbon emissions, which contributes to both climate change and dwindling fuel reserves. Making businesses more energy efficient is seen as a largely untapped solution to addressing global warming, energy security and fossil fuel depletion. As pressures mount on businesses to become more energy efficient, managing resources effectively is proving more essential than ever. In addition, customers are increasingly asking for assurance from organisations that they treat the environment responsibly and are able to demonstrate energy efficiency. ISO 50001:2011 is intended to give energy management system guidance to companies and organisations so that they can develop and implement energy policies, objectives, targets and action plans, which take into account legal requirements and other information relevant to energy use. A management process is required to proactively assess, manage, and measure energy usage; the introduction to the standard makes it clear that implementing ISO 50001:2011: “…should lead to reductions in energy cost, greenhouse gas emissions and other environmental impacts, through systematic management of energy.” Many organisations currently have limited levels of the expertise necessary to achieve these reductions and so need guidance on how to do so through best practices. Improvements in energy efficiency will require systems and processes necessary to improve energy performance. Companies and organisations will need to manage the way in which they use energy in order to reduce GHG emissions and other environmental impacts, as well as reductions in energy costs and wastage. ISO 50001:2011 provides a framework for integrating energy efficiency into existing industrial management systems and enables organisations to take a systematic approach to achieve continual improvement of energy performance, energy efficiency and energy conservation. In addition, a survey done by Carbon Trust released on March 23, 2011, suggested that for those companies able to provide credible evidence of improving their environmental impact there are considerable commercial and reputational opportunities, not least the fact that of those surveyed, more than 50% are more loyal to brands that can show, at a glance, evidence of action. 70% of people want businesses to mandatorily disclose their carbon emissions, and 66% of the public question the authenticity of climate claims made by companies. The research shows that the majority of consumers (60%) need third-party evidence of action from a respected climate change body before believing corporate claims. Just 7% believe the word of companies on their climate change responsibilities and actions to reduce their impacts3 . Reports suggest that there is a distinct correlation between the strongest, most successful brands, and those brands that score highly on the categories of Corporate Reputation, Leadership and Innovation. Environmental responsibility is one of the top characteristics of leading companies. In summary, the ISO 50001:2011 EnMS standard provides the following benefits: • Strategic planning that requires measurement, management, and documentation for continuous improvement for energy efficiency and cost savings • Addressing policies and procedures based on all aspects of energy purchase and use • Demonstrating continuous improvement in energy efficiency • It creates documents that are useful for additional energy saving projects that are undertaken as well as for evolving into policies • Identifying key performance indicators, unique to the company, that are tracked to measure progress 2 Economist Intelligence Unit Report. Countdown to Copenhagen. Available at: http://graphics.eiu.com/marketing/pdf/copenhagen/Sustainability_2009.pdf 3 Carbon Trust 2011 press releases “Only 7% of the public believe company claims of action on climate change “ 21 March 2011. Available at: http://www.carbontrust.co.uk/ news/news/press-centre/2011/Pages/company-climate-change.aspx
  • 11. 10 * Please note that stand-alone pre-audits (gap analysis), can be carried out independently of any certification activity. ISO 50001:2011 CERTIFICATION PROCESS Step A Agree Contract Step B Optional Pre-Audit Surveillance Visits typically at 6 to 12 month intervals Step C Stage 1 Audit Step D Stage 2 Audit Certificate Issue on Completion of Successful Audit Step E Surveillance Visits Step F Re-Certification Audit Action and Closure of Identified Non-Conformities Action and Closure of Identified Non-Conformities Certification Cycle typically 3 years Assessment and Certification • Assisting organisations in making better use of their existing energy- consuming assets • Offering guidance on benchmarking, measuring, documenting, and reporting energy performance improvements and their projected impact on reductions in greenhouse gas emissions • Creating transparency and facilitating communication on the management of energy resources • Promoting energy management best practices and reinforcing good energy management behaviours • Assisting facilities in evaluating and prioritising the implementation of new energy efficient technologies • Providing a framework for promoting energy efficiency throughout the supply chain • Facilitating energy management improvements in the context of greenhouse gas emission reduction projects HOW DOES THE ENERGY MANAGEMENT SYSTEM CERTIFICATION PROCESS WORK? The ISO 50001:2011 certification process, which is similar to ISO 14001:2004, consists of the following six steps: • Step A – You are provided with a proposal based on the size and nature of your organisation. You can then proceed with the audit by accepting the proposal. • Step B – You may have a ‘pre-audit’* performed to give an indication of the readiness of your organisation for the audit. This stage is optional, yet it is often found useful in identifying any weaknesses in your systems and in building confidence before the formal audit. • Step C – The first part of the formal audit is the ‘Stage 1 – Readiness Review’. This is an evaluation of the compliance of your documented system with the requirements of the standard to better understand the nature of your organisation, to plan the rest of the audit as effectively as possible and to initially examine key elements of the system. You receive a report after this stage identifying any concerns or observed non-compliances so that you can take immediate action if required. • Step D – This is ‘Stage 2’ of the initial audit process. The audit includes interviews with you and your colleagues and the examination of records. Observation of your working practices determines how compliant your actual processes are with the standard and with your own documentation system. At the end of this stage, you are presented with the findings of the audit classified as either major or minor non-conformances along with other observations and opportunities for improvement. Once you have addressed the non- conformities, a technical review of the audit will then be conducted by an authorised Certification Manager to confirm the issuance of a certificate. • Step E – Surveillance visits will be scheduled at either six or twelve month intervals depending on the contract. During the visits, there are reviews of the implementation of the action plan addressing the past non-conformities and examinations of certain mandatory and other selected parts of the system in line with an audit plan that you are provided with before each visit. • Step F – Shortly before the third anniversary of the initial certification, a routine visit will be extended to enable a re-certification audit. Surveillance visits will then continue, as before, on a 3-year cycle.
  • 12. 11 V. HOW ISO 50001:2011 RELATES TO OTHER INTERNATIONAL STANDARDS RELATIONSHIPS BETWEEN ISO 50001:2011, ISO 14001:2004 AND ISO 9001:2008 ISO 50001 is based on the common elements of the ISO management system standards ensuring a high level of compatibility between ISO 9001 and ISO 14001. Consequently, organisations that already have an ISO 9001 system or an ISO 14001 system in place can easily integrate an ISO 50001 system into their existing structures. ISO 9001 is a Quality Management System (QMS) which gives organisations a systematic approach for meeting customer objectives and ensuring quality consistency. ISO 14001 is an Environmental Management System (EMS) which provides a system for measuring and improving an organisation’s environmental impact. The relationship between ISO 50001:2011, ISO 14001:2004 and ISO 9001:2008 are outlined in the following chart:
  • 13. 12 management commitment (P) roles, responsibility & authority (P) Competence training & awareness Communication Documentation (D) Operational control Internal audit (C) Monitoring & measurement (C) Corrective & preventive action management review iso 50001 energy policy Energy review Energy performance indicators Energy baseline Energy management iso 14001 environmental policy Environmental aspects Emergency preparedness Environmental management programme iso 9001 quality policy Customer focus Planning of product realisation Customer-related processes Control of nonconforming Design Procurement Objectives and targets Legal requirements Management commitment Roles, responsibility & authority Competence, training & awareness Communication Operational control Monitoring & measurement Documentation Internal audit Corrective & preventive action Management review
  • 14. Within the scope of ISO 14001 EMS it is believed many organisations can effectively deal with energy performance. To support this position, it is important to clarify who the standard is ideally intended for; and to interpret what differentiates ISO 50001 from ISO 14001. On comparing ISO 50001, ISO 14001 and ISO 9001, there are many similarities but also differences in approach and degrees of prescription, as shown in the chart on the facing page. OTHER APPROACHES TO SUPPORTING THE GREEN ECONOMY Climate change is one of the greatest challenges to the future of the planet. International, regional, national, and local initiatives are being developed and implemented to limit levels of GHG emissions into the atmosphere. GHG initiatives rely on the assessment, monitoring, reporting and verification of GHG emissions and removals. ISO 14064 Greenhouse Gases — Part 1 and Part 2 ISO 14064-1: details principles and requirements for designing, developing, managing and reporting organisation- or company-level GHG inventories. It includes requirements for determining GHG emission boundaries, quantifying an organisation’s GHG emissions and removals, and identifying specific company actions or activities aimed at improving GHG management. ISO 14064-2: focuses on GHG projects or project-based activities specifically designed to reduce GHG emissions or increase GHG removals. It includes principles and requirements for determining project baseline scenarios and for monitoring, quantifying and reporting project performance relative to the baseline scenario and provides the basis for GHG projects to be validated and verified. ISO/DTS 14067.2 Carbon Footprint of Products Throughout the lifecycle of a product (ie cradle-to-grave) GHGs are a concern. From raw material acquisition to production, product use or product end-of-life treatment GHG emissions are produced. ISO 14067 details principles, requirements and guidelines for the quantification and communication of the carbon footprint of products (CFPs). These are based on GHG emissions and removals over the life cycle of a product, including both goods and services. The communication of CFPs is based on a CFPs report in order to provide stakeholders with an accurate, relevant and fair representation of CFPs. This international standard is based on the ISO 14020 series, ISO 14040 series and ISO 14064-1. It aims to set more specific requirements for the quantification and communication of CFPs. Specific requirements apply where the information on CFPs is intended to be publicly available. ISO/ DTS 14067.2 was published on May 7, 2013, for consultation and is expected to be finalised for publication in April 2014, according to ISO. Leadership in Energy and Environmental design (LEED) Green building is the practice of increasing the efficiency with which all buildings use resources: energy, water, materials, etc. Green building is the term for building with efficient practices to reduce the impacts on human health and the environment. These practices may include improved design, construction, operation, maintenance, and removal: in other words, the complete life cycle of buildings. The Leadership in Energy and Environmental Design (LEED) Green Building Rating System is a third-party certification programme, which is globally accepted as a benchmark for the design, construction and operation of high performance and environmentally- friendly buildings. Green buildings consume on average 40-50% less energy and 20-30% less water than a conventional building. However, there is an associated increased cost of about 5-8% with green buildings. This cost is recoupable over a period of 3-5 years. LEED is an internationally recognised mark of excellence and provides building owners and operators with a framework for identifying, implementing, and measuring green building design including construction, operations and maintenance solutions. LEED Rating Systems are developed through an open, consensus-based process led by LEED committees according to the US Green Building Council (USBGC). If adopted, ISO 50001 Energy Management Systems could help to certify green building at an earlier stage (e.g. the operational stage) and benefit the LEED programme by increasing its uptake. When organisations implement an EnMS they need to have in place monitoring and measurement results that meet ISO 50001 clause 4.6.1: ‘Monitoring, Measurement and Analysis’. This section is a key component of LEED requirements. When ISO 50001 is implemented in new developments at the design stage, it allows building owners to understand the benefits of meeting the requirements of ISO 50001. It also makes it easier to adopt ISO 50001 in the operation stage. ISO 50001 looks at an organisation’s energy performance in detail and concludes with specific requirements that lead to better energy performance 13
  • 15. Key Elements ISO 50001:2011 ISO 14001: 2004 ISO 9001: 2008 Policy The organisation’s enhanced energy efficiency (usually with cost reductions too), combined with relevant law and regulation requirements will be the main concern of the energy policy. The organisation’s significant environmental aspects together with applicable legal and regulatory requirements are the main concern of the environmental policy. Meeting customers’ expectations is the main concern of the quality policy. Planning To develop an energy profile, identify significant energy uses, define an energy baseline and establish energy performance indicators. Identify applicable laws and regulations, and then establish objectives, targets and action plans. To identify environmental aspects and relevant laws and regulations requirements. Establish environmental objectives, targets and programmes. It requires quality objectives definition and quality management system planning. Baseline The establishment of an organisation’s energy baseline is a fundamental element of the EnMS, since ‘Changes in energy performance shall be measured against the energy baseline.’ No specific requirement beyond continual improvement. No specific requirement beyond continual improvement. Objectives & Targets Energy objectives and targets are primarily ‘internal management objectives’ mixed with ‘external requirements’ where laws and regulations may apply. Environmental objectives and targets are either related to an organisation’s significant environmental impacts or to external mandatory requirements set mainly by relevant laws and regulations. Most of the quality objectives are ‘management objectives’ such as the ‘conformity rate’. They are usually ‘internal control requirements’ and determined mainly by the organisation itself. Resource Allocation Human resources competence, equipment and facilities are equally important in affecting the achievement of energy targets. In industry, energy efficiency is in many instances more related to operational practices than to the energy performance of individual equipment. Equipment and facilities have a direct and important effect on the achievement of environmental targets. The MS performance does not rely solely on equipment and facilities. The requirements regarding human resources are very important. Design Design is part of ISO 50001 Implementation & Operation: ‘… consider energy performance improvement opportunities and operational control in the design of new, modified and renovated facilities, equipment, systems and processes that can have a significant impact on its energy performance.’ Design control is not included as a separate clause. It is considered in a more indirect way on Environmental Aspects identification. Product design and development is a critical process. Purchasing It includes separate clauses for the purchasing of energy services, products, equipment and energy purchasing. Purchase control is not included as a separate clause, but is mentioned under operational control. It focuses mainly on materials, components and services. Monitoring & Measurement Monitoring, measurement and analysis of the key characteristics of an organisation’s operations that determine energy performance. Key characteristics also include actions plan effectiveness in achieving objectives and targets. Monitoring and measurement of the key ‘process characteristics’ related to identified significant environmental impacts, and consequently, objectives and targets. Monitoring and measurement of the product is very important, including raw material. Reference: Li Tienan, ISO regional seminar on Energy Management and ISO 50001: “How ISO 50001 relates to ISO 9001 and ISO 14001, Bangkok, Thailand, 2010.” 14
  • 16. 15 VI. INTEGRATING ENVIRONMENTAL AND ENERGY MANAGEMENT SYSTEMS: PROCESS AND BENEFITS WHY ISO 50001 IS THE NEXT LOGICAL STEP FOR AN ISO 14001 CERTIFIED ORGANISATION? Many organisations that hold an ISO 14001 certificate follow it with an ISO 50001 standard. This is because the ISO 14001 provides a broad certification covering a variety of different environmental criteria (air, water, waste, energy etc.) while the ISO 50001 focuses on the area of energy efficiency alone. Within the ISO 14001, energy is just one of the environmental criteria that organisations need to identify and address as part of an Environmental Management System (EMS). In this, all environmental factors are assessed in the same way. The ISO 50001 instead looks at an organisation’s energy performance and its environmental impacts in detail and concludes with specific requirements that lead to better energy performance. These quantitative requirements are fundamental to the effective implementation of an Energy Management System (EnMS). To achieve ISO 50001, each variable affecting an organisation’s EnMS needs to be fully understood in terms of its implications on energy performance. This is a greater depth of understanding than is required within the ISO 14001. Additionally, ISO 50001 determines what information an organisation should be monitoring and measuring as part of its EnMS, setting a minimum of five key characteristics as the minimum requirements. The ISO 50001 is specific in defining end goals for the processes associated with achieving these requirements. The ISO 14001 does not require as much detail and gives an organisation a greater degree of freedom in terms of measurements, depending on its environmental objectives. The result for an organisation introducing the ISO 5001 is that is able to effectively achieve energy efficiency improvements. STEPS TO INTEGRATE THE MANAGEMENT SYSTEMS In Environmental Management Systems and Energy Management Systems there are certain common elements that can be managed in an integrated way. Uniting these systems benefits an organisation in terms of cost savings and efficiencies. The integration of the two systems needs to be planned and implemented in a structured way, following a five-step process: Step 1 – Gather the right team Engage technical staff with environmental and energy management knowledge to support the management system implementation team. These individuals could be facilities managers, logistics managers, fleet managers, procurement and purchasing managers, or come from other associated technical backgrounds. Step 2 – Gap analysis audit Determine the boundaries and applicability of the two management systems and establish the scope. It is recommended that the scope for the integrated management system reflects the widest requirements of the individual systems at the operational level. A gap analysis audit allows identifies the processes needed for the implementation, operation and maintenance of the integrated management system throughout the organisation. This forms the basis for project planning. As part of this, the ISO 50001 requirements that are already implemented should be identified. This could also include requirements that are specific to the ISO 50001, such as an energy review or energy performance indicator, which an organisation may already have established. The gap audit helps the organisation to have a whole picture of what needs to be addressed to meet the complete requirements of the standard. A competent auditor should perform the audit to ensure all requirements are correctly assessed. Step 3 – Implement the integrated management system • Identify the processes needed for the implementation, operation and maintenance of the EnMS and EMS throughout the organisation • Establish, implement and maintain a process to determine any legal requirements related to the organisation’s activities, products and services that are relevant to the scope of the EnMS and EMS • Determine the sequence and interaction of these processes and whether the integration of these processes is possible • Determine the criteria and methods needed to ensure that the operation and control of these processes is effective • Ensure the availability of resources and information necessary to support the operation and monitoring of these processes • Monitor, measure and analyse these processes. Implement actions as needed to achieve the planned results and continual improvement of the organisation’s overall performance All non-conformities identified during the gap analysis audit should also be addressed. Step 4 – Internal audit and management review Perform an internal audits related to the ISO 50001 and 14001 requirements. These can be done at the same time as long as the auditors have the required competences to achieve both. Similarly, the management review for ISO 50001 uses some of the same information as the review for ISO 14001 and the outcome of these two reviews together can be used to close the management system loop.
  • 17. 16 Integrating an organisation’s EMS and EnMS reduces duplication, improves overall efficiencies and further boosts cost savings. Step 5 – Certification audit Certification audits for both the ISO 50001 and the ISO 14001 can be performed at the same time. The number of days required for a joint audit is less than if the audits are performed separately. The more integrated the two management systems, the more effective the use of audit time and therefore the less the time requirement. Individual certificates for each standard are still received. BENEFITS OF INTEGRATING THE MANAGEMENT SYSTEMS Integrating an organisation’s EMS and EnMS means that the common requirements of the two management systems can be consolidated. Overall objectives can then be prioritised based on return on investment. This leads the organisation to develop efficient means to manage all the necessary resources, ultimately saving time and money. By bringing the implementation of the management systems together the committees responsible for putting the systems in place can also benefit from shared learning experiences. For any organisation that already has an EMS and is introducing and integrating an EnMS, many procedures would already exist that could be extended to cover the additional requirements of the integrated management system. This is likely to include an information system, which is used for collecting and disseminating information related to the requirements of the standards, as well as trained technical staff, such as internal auditors. Any organisation already certified against the ISO 14001 would be able to simply integrate the matching requirements of the ISO 50001, such as the Record Keeping System, Document Management System, and Training and Awareness Activities into those that already exist. Obviously this does not apply to ISO 50001 specific requirements such as the criteria for identifying Significant Energy Use and the development of an Energy Management Action Plan. Overall, the benefits achieved by integrating the EMS and EnMS management systems are numerous and include: • An improved business focus • A more holistic approach to managing business risks • Less conflict between individual management systems • Reduced duplication and bureaucracy • More effective and efficient audits both internally and externally • Easier facilitation of the requirements of any new management system For each new system that is integrated, procedures and resources can generally be expanded to meet the additional requirements. By following this process, as opposed to separately introducing a new system, organisations are able to prevent duplication, improve efficiency and benefit from cost savings.
  • 18. 17 VII. CASE STUDY – AU OPTRONICS BENEFITS FROM IMPLEMENTING ISO 50001:2011 AU Optronics Corp. (AUO) AUO is the first manufacturer in the world to have gained ISO 50001:2011 certification for its Gen 8.5 Fab in Central Taiwan Science Park. The company has consistently pushed its efforts in energy-saving practices and has received global recognition: AUO received the world’s first LEED Platinum Certification from USGBC. The company viewed achieving ISO 50001:2011 as the ‘next global highlight’ (following ISO 9001:2008, the quality management system, and ISO 14001:2004, the environmental management system) in order to set AUO apart from its competitors worldwide. SGS was on hand to help AUO attain ISO 50001 and implement the certification to front-end TFT and back-end module facilities. The goal for AUO is to achieve 25% energy savings in 2015, with 2010 as the base year. They are also searching opportunities that relate to improving their energy performance through management procedures. SGS’ assistance in incorporating management system changes has helped AUO reduce energy use by 10% at AUO’s Gen 8.5 Fab in Central Taiwan Science Park in 2011. More than 30 energy performance indicators (EnIPs) were set for plants and divisions to monitor energy performance on a month-by- month basis. An estimated 55 million kWh of electricity will be saved, and 35 thousand tonnes of carbon emissions reduced: the equivalent effect of the afforestation of New York Central Park nine times over. The projected energy saving objective was twice as high as the group’s annual objective. With the success they have already experienced, AUO plans to expand the ISO 50001:2011 energy management system across all its operations in the future. Plans are also in place at AUO for energy performance assessment to take place during procurement, to further enhance value chain energy management. Adopting ISO 50001 is key to achieving 25% energy savings between 2010 and 2015.
  • 19. 18 ABOUT THE AUTHOR Eric G.T. Huang Global Product Manager, Energy/Sustainability, SGS Eric G.T. Huang has 24 years environmental engineering and management experience in audit, consulting, engineering and operation, specialising in energy and climate change. He is now responsible for the technical development of SGS’ Energy Management Systems certification services, including ISO 50001:2011 and other sustainability services. Eric holds a Master’s degree in Civil and Environmental Engineer from Rutgers University, US. ABOUT SGS SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognised as the global benchmark for quality and integrity. With more than 75 000 employees, SGS operates a network of over 1 500 offices and laboratories around the world. Enhancing processes, systems and skills is fundamental to your ongoing success and sustained growth. We enable you to continuously improve, transforming your services and value chain by increasing performance, managing risks, better meeting stakeholder requirements and managing sustainability. With a global presence, we have a history of successfully executing large-scale, complex international projects. Our people speak the language, understand the culture of the local market and operate globally in a consistent, reliable and effective manner. SGS has worldwide expertise in supporting energy efficiency and innovation. Our global presence and knowledge of local legislations and regulations gives you the peace of mind of knowing that you are minimising your environmental impact and improving your energy consumption. We are the global leader in ISO 14001 Environmental Management Systems certification and greenhouse gas verification and an international front runner in Energy Management solutions. For more information, visit www.sgs.com/energy or contact energy@sgs.com VIII. Conclusion ISO 50001:2011 combines the benefit of a business management tool for energy management and business processes, with the ability to meet growing global customer requirements for reduced GHG emissions. Certification can provide generic assistance to an organisation for establishing, implementing or improving an EnMS. Global application of an energy management standard contributes to a more efficient use of available energy sources, enhanced competitiveness and a positive impact on climate change. Certifying your EnMS helps your organisation to develop and improve performance and reduce costs. COPYRIGHT NOTICE The information contained in this document represents the current view of SGS SA on the issues discussed as of the date of publication. Because SGS must respond to changing market conditions, it should not be interpreted to be a commitment on the part of SGS, and SGS cannot guarantee the accuracy of any information presented after the date of publication. This White Paper is for informational purposes only. SGS makes no warranties, express, implied or statutory, as to the information in this document. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of SGS. SGS may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from SGS, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property. ANY REPRODUCTION, ADAPTATION OR TRANSLATION OF THIS DOCUMENT WITHOUT PRIOR WRITTEN PERMISSION IS PROHIBITED, EXCEPT AS ALLOWED UNDER THE COPYRIGHT LAWS. © SGS SA 2011 – REVISED IN 2013 – ALL RIGHTS RESERVED.