Energy Management Aims to Be the Next Big Standard

Electronics Retailer Best Buy just announced it is adopting a new energy management system in its U.S. stores that it thinks will cut its energy use and carbon emissions by 15 percent. I’ve got a call coming up with the company’s head of environmental sustainability to find out more. The timing is great, because of the work we are doing on the new ISO 50001 energy management standard. I don’t know if 50001 is in the cards at Best Buy, but we’ll find out soon.

I’m spending a lot of time talking to companies about ISO 50001, which was published in June. There are questions about how fast it is going to be adopted and what this means for companies, their suppliers and the standards certification ecosystem. That’s why we are undertaking a study of the dynamics that will drive adoption over the next five years. (See my recent column on this topic.)

My background research includes a review of the literature about two older ISO standards: 9001, which deals with quality management, and 14001, which deals with environmental management. There are lots of views about why companies adopt such standards and what the benefits are. Generally there seems to be a mix of internal drivers (a company is seeking to improve its own performance) and external drivers (in the form of customer or regulatory pressure).

In the view of one standard certification expert I spoke with today, the ISO 9001 quality management standard was driven in large part by big companies that wanted to exact higher quality from their suppliers at lower cost. Rather than fielding an army of quality engineers running around the supply base to ensure compliance with their own quality standards, these companies pushed the responsibility (and the cost) of meeting quality standards onto suppliers, by requiring them to obtain ISO 9001 certification.

If ISO 9001 was driven by obligations to customers, ISO 14001 may have been drive by a broader set of obligations. According to one study, “The most significant motive for implementing ISO 14001 is enhancing corporate image, gaining marketing advantage, reducing customer pressure, and to improve its relations with communities and authorities” (Poksinska, Dahlgaard & Eklund, 2003).

ISO 50001 may have a similarly broad set of drivers. The standard establishes sound practices for energy management that should reduce risks and create a platform for continuous energy efficiency improvements. Companies may be motivated to adopt it to demonstrate mastery of their energy management, which is becoming an increasingly strategic issue. In addition, a growing number of companies are starting to take responsibility for the environmental and social performance of their supply chain. They are finding that their suppliers often account for a substantial share of their value chain’s economic impacts. So they may consider requiring their suppliers to obtain ISO 50001 certification as a way of getting a grip on their upstream energy use and attendant carbon emissions.

This is going to be an interesting area to study, with important implications for a variety of companies big and small. If your company would like to participate as a charter subscriber to the study, please drop me a line. And if you have any thoughts on the development of ISO 50001, feel free to leave a comment.

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