BUSINESS STANDARDS
is the quarterly magazine of BSI Group, highlighting the vital role that standards play in today's business environment. Regular features include interviews with leading business figures, as well as news on the latest developments in management systems and standards.

Business Standards > Articles

Power to the people

11 Sep 2009
Topics: Energy management, EN 16001, Carbon footprint, Carbon market, GHG, SME, CFV, Emissions trading

Concerns about carbon emissions, along with the push towards a low carbon economy and a heightened awareness of the risks posed by volatile fuel prices, mean that organizations are under pressure to optimize energy use as never before.

There's been a rapid shift in public attitudes about the environment in the 12 years since Kyoto, but business attitudes have been slower to change. Combating climate change costs money and the relatively low price of energy in the late nineties and early years of the new century meant there was little incentive to cut consumption.

The oil price shocks of 2008 changed all that. Even modest energy users were forced into a fundamental reappraisal of consumption, with organizations scrambling to squeeze more out of every gallon of fuel, every kilowatt-hour of electricity and every cubic metre of gas. And there could be bigger issues at stake. According to official estimates, the UK could be importing as much as 80 per cent of the gas it uses by 2020. Energy security is a new priority for government.

"We could become very heavily import dependent," warns Malcolm Wicks MP, the Prime Minister's special representative on international energy issues. "The starting point has to be energy efficiency across all sectors. This hits the button in terms of climate and it certainly hits the button in terms of energy security. But it's about business efficiency as well - businesses of all sorts waste a great deal of energy and there are ways of becoming more energy efficient."

Arguably, what organizations need is a road map to improved efficiency: "Once you have an agreed structure in place and a policy that has been signed off by the board, you have top management buy-in," says Ian Richardson, BSI committee manager for energy. "Everybody from the top down to the workforce knows exactly what the policy is going to be."

The right path

BS EN 16001 Energy management systems offers such a road map to organizations. This new standard has been created to help organizations improve energy efficiency, reduce greenhouse gas (GHG) emissions and drive down energy costs. The standard applies to all energy-related activities under the control of an organization. For example, it takes account of the power used by machinery and the energy needed to heat office buildings. These "energy aspects" represent elements of an organization's activities, goods or services that can affect energy use.

Organizations however large or small - in any sector - can benefit from the approaches set out in the new standard. These include big multi-site industries, public sector bodies and SMEs - including those that might not have used a management system standard before.

The relevance of the standard to all parts of UK plc is reflected by the diversity of the organizations taking part in BSI's current implementation pilot. These include passenger rail operator Virgin Trains, the bearing manufacturer SKF, leading milk business Robert Wiseman Dairies plc, the City of London Corporation - the local authority for London's financial heart - and ND Metering Solutions, which designs and manufactures advanced electricity metering equipment.

Initial findings indicate that the creation of an energy management system provides organizations with a mechanism to turn energy efficiency into a key performance indicator, alongside more traditional KPIs such as safety, performance and customer satisfaction.

The standard requires that organizations establish their own minimum reduction targets for each significant energy aspect identified in an initial review. These targets can be expressed in a number of ways, such as the amount of energy consumed per kilogram, per square metre or per item produced. Organizations must establish reliable ways of measuring consumption data, such as automatic metering of electrical energy, as well as gas and water use.

"The standard talks about listing your energy aspects, then prioritizing, measuring and budgeting for them," says Mark Fraser, BSI group product manager for sustainability. "A distribution business would look at fuel consumption by its trucks. For a consultancy, it might be flights. The fact you don't own an aeroplane doesn't obviate you from having to be responsible about your use of energy."

The standard covers energy aspects under the control of the organization, so indirect energy consumption, such as fuel used by employees driving to work, is beyond its remit. But it does mean that organizations must consider energy efficiency when procurement decisions are made for machinery, raw materials and services. Once the standard is established, it is expected to cascade down through the supply chain, with organizations encouraging suppliers to conform in order to meet their own targets for corporate social responsibility, or embodied energy in their products and services.

"Having or being certified to the standard obliges the organization to declare its policy on energy in a way that commits it to continual improvement of performance," says Vilnis Vesma, a senior energy consultant with NIFES Consulting Group, an organization that has advised UK businesses on energy efficiency for more than half a century. "It commits management to adopt a policy of reduced energy use."

Switched on

Energy management is based on the Plan-Do-Check-Act (PDCA) methodology. The "plan" component includes establishing the objectives and processes needed to deliver results in accordance with the energy policy; the "do" element concerns implementation, while the "check" dimension includes monitoring and measuring processes. The "act" requirement focuses on the need to continually improve performance of the energy management system.

"It means putting practices in place that enable you to know what you're using, having a list of opportunities for making improvements, and then actually doing it and checking that you've got the results," explains Professor Martin Fry, who chaired the UK mirror committee for the new standard. "That's important - so often in the energy world, you've got the list of opportunities, but nobody actually bothers with them."

Critically, the new standard allows organizations to lock-in a top-to-bottom commitment to energy efficiency.

"Many successful energy saving campaigns are the fruit of enthusiastic and sometimes subversive individuals," emphasizes Vesma, who sat on the drafting committee for the new standard. "But this standard creates a management framework that embeds a culture of energy management and ongoing efficiency projects that will survive the departure of the original enthusiast."

Legislation is likely to be an increasingly important driver for take-up of the standard. The implementation of the government's Carbon Reduction Commitment (CRC) in April 2010 will force energy efficiency even further up the agenda. CRC is legally binding and will target large public and private sector organizations across the UK, including supermarkets, banks, local authorities and government departments. BS EN 16001 will give these organizations the systematic tools to continue to match the inevitable tightening of the CRC in coming years.

Certification to the new European standard is not obligatory, but does provide a number of important advantages: it provides proof of adherence to industry best practice, with regular independent assessments to ensure that an organization is continually improving and refining its activities.

"The benefits of being certified to this standard are that it enables you to demonstrate you are managing your energy consumption, which will save you money. It also means you are in a position to reduce your carbon footprint, so you've demonstrated your commitment to energy efficiency and protecting the environment," says Professor Fry. "Organizations have to have a position now - it's no longer acceptable to say we don't bother about energy consumption. This standard has been developed to address that issue - and to get it up the agenda in business."

A certification scheme enabling organizations to be independently assessed and certified to BS EN 16001 is currently being developed by BSI with a pilot assessment programme commencing in the autumn. The certification scheme will enable organizations to demonstrate their commitment and effectiveness in managing and enhancing their energy performance and reducing their energy consumption and, in doing so, will enable them to protect and enhance their reputations.

For more information on the energy management standard, visit:www.bsigroup.com/aug09energystandard

For more information on energy management certification, visit:www.bsigroup.com/aug09energycertification

CASE STUDY: BS EN 16001 In a nutshell

BS EN 16001 Energy management systems is designed to help organizations improve energy efficiency, reduce greenhouse gas emissions and drive down energy costs. The standard, published in July 2009, will be launched at BSI's Efficient Energy Management conference in September.

"It's essentially a best practice document that will allow businesses to implement their own energy management systems and to get an appreciation of their own energy usage. It explains what steps they need to take and who they need to get involved in their businesses to help," says BSI's Richardson. An energy management system is the name given to the systems, processes and practices a business needs to improve energy efficiency. Similar in structure to the environmental management standard, ISO 14001, BS EN 16001 provides the guidance that organizations need in order to create such a system.

CASE STUDY: To a new standard

Organizations that wish to take the next step beyond certification to BS EN 16001 can choose to encompass all their greenhouse gas emissions and measure their carbon footprint. Any subsequent reduction in energy use - and therefore their carbon footprint - can then be verified against ISO 14064-1 with BSI's carbon footprint verification (CFV) service. Over time, verified carbon footprint reductions will enable the organization to make marketing claims about those reductions and, in conjunction with a carbon offsetting programme, credibly underpin a declaration of carbon neutrality.

CASE STUDY: Energy management: principles and practice

To complement the energy management standard, BSI has commissioned a book* to provide businesses with the practical know-how they'll need to put energy management into practice. The book's author, energy consultant Vilnis Vesma, highlights these eight energy-saving tips:

- investigate and improve awareness and motivation;

- provide training for personnel with significant influence over efficiency;

- assess actual against expected consumption regularly;

- identify significant deviations, track down and rectify;

- develop energy-aware maintenance and repair policies;

- improve or introduce automatic controls;

- look for opportunities to reduce losses; and

- look for opportunities to improve conversion efficiencies - extracting as much useful work as possible from each unit of energy used.

*Energy Management: Principles and Practice. A companion to BS EN 16001 can be ordered at: www.bsigroup.com/bip2187

Business Standards © 2009. Editorial produced by Caspian Publishing in association with the British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.

Question: Given the state of the environment, should issues like energy management in business be more regulated and closely monitored instead of voluntary?

Climate change is such an urgent issue that some might argue the only answer to this question is "Yes". However, creating laws that achieve their goals in precisely the right way is challenging and time consuming at the best of times. And when it comes to climate change, the factors involved are varied - too many for any one law or set of laws to cover adequately.

Read more

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