Energy Management System Standards Reply

For those of you who are still eagerly awaiting the release of  the ISO 50001 energy management system standard (due to be released early next year), there is a British Standard, BS EN 16001, that can be used now.  This British energy management system standard has been a key priority for European delegates contributing to the development of the ISO standard in the much slower international standards setting arena.  These delegates are working closely with ISO to make sure there will be no disincentive for the early adopters of EN 16001 when ISO 50001 is released.  The use of this standard is also providing some information to those writing the ISO 50001 standard. 

The aim of this European standard is to help organizations establish the systems and processes necessary to improve energy performance and make reductions in both cost and emissions of greenhouse gases.  Launched in July 2009, this standard effectively presents a business with a roadmap of the various steps to be taken to ensure it is viewed as being serious about energy management.  The promotion of the standard notes that the combination of energy reduction and risk management is more financially advantageous than merely buying additional carbon credits or offsets to lower the carbon emissions that are reported to the public. 

The standard helps businesses ask the right questions of themselves and adjust their internal processes and decision-making accordingly.  These businesses use the plan-do-check-act (PDCA) framework to establish objectives and processes, implement some changes, monitor their results and finally act again to deliver incremental improvements in performance over time.  Some companies in the UK are required to certify to this standard because of the “Carbon Reduction Commitment Energy Efficiency Scheme” that was launched in April 2010 to support attempts to reduce the greenhouse gas emissions in accordance with the Climate Change Act of 2008.  There are similar requirements in the European Union.

To keep up to the demand in the United States, the US Department of Energy is making draft copies of ISO 50001 available to certain technical assistance providers to use for their own energy conservation programs.  However, no climate change legislation has been enacted in the United States.  A company can purchase a draft of ISO 50001 and use it while the final standard is being subject to its final international ballot.  You do not need to be involved in these Department of Energy projects to do so.

It is important to note that the “aspects” determination in ISO 14001 was designed for looking at all resources:  water, energy and materials.  Energy is very important to all companies and their stakeholders.  Unless you find that you need to certify to an energy management standard, you may be better off looking at both the BS EN 16001 and the draft ISO 50001 and using the information to strengthen your existing ISO 14001 program.

ISO 26000:2010 (Social Responsibility Guidance) Released 1

The ISO 26000:2010 social responsibility guidelines have been finalized and published.  It is now possible to add social responsibility “core subjects” from this new standard to an ISO 14001:2004 or ISO 9001:2008 program.  This would create an integrated sustainability management standard.  ISO 26000:2010 cannot be used alone as a sustainability management system.

CAPACCIO likes this standard since it clearly articulates a wide range of social responsibility issues that sustainable companies need to watch closely; e.g., community involvement, human rights, labor issues, and consumer/customer issues.  Incorporating conformance to social issues within a management system will help coordinate those who manage the environmental responsibilities with those that manage the social responsibilities.

A recent survey found that 86% of employees are not engaged by their employers on sustainability even though the same amount – 86% – said that their organization promotes employee sustainability.  It is possible to engage employees more effectively using a management system rather than relying on only on training and awareness.  A properly implemented management system can make sustainability part of what every employee does every day by including it in the work instructions and every aspect of their involvement with the organization.  CAPACCIO is already seeing this make a difference with our clients that are integrating their sustainability efforts directly with their sustainability efforts.  The new ISO 26000:2010 standard will make this effort easier and more effective.

CAPACCIO is preparing a “white paper” on how to use ISO 26000:2010 with your management systems.  Please reserve a copy by contacting Bob Pojasek at rpojasek@capaccio.com or calling him – 508-970-0033 Ext. 137.

Management by Objectives Reply

By Bob Pojasek, PhD, Senior Program Director, Capaccio Environmental Engineering, Inc.

Most sustainability programs are operated by using a “management by objectives” approach.  Here’s how it works:  companies select sustainability indicators from a list of measures (e.g., the Global Reporting Initiative or GRI list) and then implement a bunch of initiatives to create results.  This seems to satisfy the stakeholders desire to have the company set goals and then measure sustainability progress, however, there is another way to measure sustainability progress. 

By using a sustainability management system (SMS), a company can look at how each of its three responsibilities impacts the stakeholders.  Then, by using a risk assessments method (e.g., ISO 31000), the company can prioritize the most important impacts.  Sustainability goals are set as part of the risk management process and a program is put in place to help the company meet these goals.  In this case, projects have action plans and the effort is coordinated to meet the goals and not just produce results as in the management by objective approach.  Corrective actions and preventive actions are also addressed in a manner that is consistent with the SMS. 

We point out this fundamental difference in how sustainability programs are operated to make a point about continual improvement.  While it is reasonable to start a sustainability effort using a familiar approach such as management by objectives, it is important to move to an approach that makes sustainability part of the way the organization is operated, day-in and day-out. 

There is a SMS in the United Kingdom (BS 8900) that requires the company to create a maturity grid.  A company starts working on sustainability by making sure that it meets all environmental, health and safety, social, and financial regulations.  Once the SMS is in place, the company becomes more proactive and seeks to change its processes in such a way that they avoid the very need for the regulatory activities.  In other words, the process no longer triggers the regulatory requirement.  Some people call this “going beyond compliance.”  By using risk management to minimize regulatory, operational and reputational risks, the company is well on its way to sustainability.

If you already have some management systems in place (e.g., ISO 9001, ISO 14001, or OHSAS 18001), you may be able to add some components to shift your sustainability program from a “management by objectives” program to a program that moves you along the maturity grid associated with your continually improving sustainability program.  It is not sufficient to let the metrics drive the program.  Rather, the metrics should help decide just how well the program is operating and improving.

Regulated by Your Customers Reply

The words environment, health and safety can bring thoughts of “compliance” to one’s mind.  The regulatory agencies MassDEP, EPA and OSHA are a reminder to us that compliance requirements are being enforced and must be met to avoid penalties or fines. This was true until companies that you sell your products to (i.e., your customers) began getting serious about something they call “supply chain management.”  Supply chain management is when your customers try to manage their risks by becoming regulators themselves.

The biggest company in the world, Wal-Mart, is one of the companies that have been pushing the envelope by “greening” their supply chain.  The company has developed a rigid 15-point sustainability index that must be met by more than 61,000 suppliers and all the factories that they use.  Failure to meet these environmental and social requirements and maintain or lower the price of your products, could result in termination of your Wal-Mart contract.

CAPACCIO recently became involved in helping a Wal-Mart customer, a leading snack food industry manufacturer, prepare for a Wal-Mart audit. Utilizing Walmart’s 15-point sustainability framework, CAPACCIO helped the client prepare for the audit by assessing the company’s current sustainability state against Wal-Mart’s index.

As part of the 15-point framework, Wal-Mart grades companies on four broad categories: energy and climate; material efficiency; nature and resources; and people and community. CAPACCIO found that the company’s current state was already quite “green.” As a family-owned business, the company opted not to promote their environmental and social successes. Wal-Mart, however, was very happy to hear their stories and learn that the snack food company was exploring a number of opportunities to further improve their operations.

CAPACCIO provided the client with an analysis of how they would be scored based on Wal-Mart’s 15-point sustainability framework at the current time. CAPACCIO also provided a number of specific action items that could be considered to help improve the score. Some recommendations were to prepare water and carbon footprint reports and disclose the results to the Carbon Disclosure Project and the newly formed Water Disclosure Project.  CAPACCIO also recommended that the client reach out to its supply chain to learn more about energy and water use in order to complete the disclosures.  We also advised the client to consider creating documentation to present the completed sustainability initiatives and post this information on the company web site or include it in a sustainability report.

CAPACCIO helped this client make an internal business case for these sustainability initiatives.  By going through this process, the business has prospered, and all of the client’s retail customers, not just Wal-Mart, have reaped the benefits.