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Energy Management Standard Fills a Need; Rate of Adoption Is Wild Card

A Powerful New Tool to Manage and Reduce Energy Consumption

Commercial and industrial enterprises globally have a powerful new tool to help them to reduce their energy consumption and greenhouse gas emissions and to cut costs. In June 2011, a new international standard for energy management systems, ISO 50001, was published. The standard establishes a framework for industrial plants; commercial, institutional, and governmental facilities; and entire organizations to manage their energy use. Developed by experts from the national standards bodies of 44 countries with an additional 14 countries observing and with the support of national and international bodies, ISO 50001 is bound to become an important driver of energy savings at organizations globally. Indeed, ISO estimates that the standard could influence up to 60 percent of the world’s energy use. Already companies on at least three continents have implemented or are implementing the standard.

Early Adopters in Europe and Asia; Broad Support Builds in U.S.

Table 1 Companies that have received ISO 50001 Certification as of October 2011

Country Company
China AU Optronics Corp.
China Delta Electronics
China Hong Kong Science and Technology Parks Corporation
France Schneider Electric
Germany Porsche
India Reliance Infrastructure Limited,
Japan Dainippon Screen MFG. Co., Ltd
S. Korea Samsung
Taiwan AU Optronics Corp.
Taiwan Sunhope Photoelectricity Co
UK Northern Rail

 

Companies in Europe and Asia have taken an early lead in obtaining ISO 50001 certification. Over 10 companies on those continents have had facilities certified already. At least one ISO 50001 pilot program is underway in the U.S. right now. Even before the standard was published, it received a strong endorsement that is sure to drive adoption in the U.S. The U.S. Council for Energy Efficient Manufacturing (CEEM), a partnership of major U.S. industrial companies, the U.S. Departments of Energy and Commerce, the Environmental Protection Agency and other groups, developed a certification standard known as Superior Energy Performance (SEP), which requires conformance with ISO 50001. According to CEEM, five industrial facilities in Texas piloted SEP from 2008-2010 and were the first facilities to gain SEP certification. These facilities achieved improvements in energy performance, ranging from 6.5 percent to 17 percent over a period of two to three years.

Energy Efficiency Goals Are Key to Sustainability Strategies

Improved energy efficiency is a cornerstone of many companies’ sustainability strategies. Green Research has found that, among companies that have publicly declared their sustainability goals, energy efficiency goals are the second most numerous after greenhouse gas reduction goals. (And most greenhouse gas reduction goals are tackled with energy efficiency measures.) This is true in diverse industries ranging from banking to food and beverages to oil and gas production. The problem—and the opportunity—is that many companies don’t yet have well developed mechanisms for managing and improving energy efficiency, a gap that ISO 50001 is intended to fill.

Impact on the Business Ecosystem

The development and adoption of ISO 50001 will have impacts beyond the companies that voluntarily implement it. As an international standard, companies seeking certification will need to employ the services of third-party auditors and certification companies such as SGS, Bureau Veritas and DEKRA. To participate, these companies must in turn train their staffs and obtain accreditation. They also need to develop and roll out marketing and service delivery capabilities. Trainers and consultants will need to upgrade their materials and their tools. Energy management companies like EnerNOC and Ecova (formerly AdvantageIQ) will need to add ISO 50001-compliant methods to their offerings as well. Energy management tools and building management systems may need an upgrade to support new capabilities, a fact that Irish software startup Enerit plays up in the pitch for its “Enerit ISO 50001 software.” It’s also conceivable that companies may one day require their suppliers to obtain ISO 50001 certification, as some commentators have urged.

Wild Card: What Will Adoption Be?

The big wildcard with ISO 50001 is this: What will the level of adoption be? There are always going to be early adopters who enjoy the recognition showered on those who step up first. But even if it’s a worthwhile standard, many companies feel that they have their hands full. One Chief Sustainability Officer I spoke with recently lamented, “It’s expensive to get certified. Is this just the standard of the week?” That’s why Green Research is planning a market study on ISO 50001. We want to find out what operations executives, facilities managers and sustainability execs think of the standard and whether they plan to move forward with it, and when. Here are some of the questions we intend to answer with our research:

  • What are corporate perceptions of the value of the ISO 50001 standard?
  • What is the level of interest and intent to invest in ISO 50001 training, auditing and certification among midsized and large companies?
  • Which market segments will see the greatest adoption of ISO 50001-related services in the next 12-36 months?
  • What level of spending are companies budgeting for ISO 50001-related services?
  • Which departments and executive levels control budget that will be used for ISO 50001-related spending?

If you are a sustainability exec or are responsible for operations or energy management at your company, I’d love to hear what you think of the standard and what your plans are.  Please consider leaving a comment below or sending me an e-mail. And if you are a provider of energy management services, consulting, training or certification and would like to support the study, please drop me a line.

David Schatsky, principal of Green Research, is a consultant and adviser to businesses on a range of topics, from clean tech markets to corporate sustainability best practices to business strategy in the Internet and information technology markets. Having spent almost a decade as an analyst and senior executive at JupiterResearch, a leading research and advisory firm focused on Internet business, Schatsky is an expert in business strategy, industry analysis and market research.

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One thought on “Energy Management Standard Fills a Need; Rate of Adoption Is Wild Card

  1. David, Thanks for mentioning Enerit. Here are some updates. The world’s first Pfizer site was certified to ISO 50001 using Enerit software. Another Enerit customer, UCC, became the world’s first university with ISO 50001. Also I know that 3 Abbott sites in Ireland now have ISO 50001. There is a lot of early adoption in Ireland because of the 2005 launch of the Irish IS 393 standard, which later evolved to become ISO 50001.

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