Why is ISO good for you? And what you should be aware of when implementing it!

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1 LRQA Guidance Why is ISO good for you? And what you should be aware of when implementing it! LRQA Business Assurance Improving performance, reducing risk

2 And what you should be aware of when implementing it! Energy comes in many forms including electricity, gas, oil and steam and is a resource used by organisations worldwide. It is becoming increasingly more expensive as the Earth s non-renewable resources are used up. So reducing your energy consumption will not only reduce your costs, but will also reduce your carbon footprint and help protect the natural environment. It also reduces your reliance on others to provide the energy you need to operate, hence reducing the risk to your organisation. Energy management is therefore, quickly becoming one of the most fundamental areas of focus across all business sectors. The new international energy management standard, ISO was issued on 15 June As with other ISO standards it is based on the Plan-Do- Check-Act cycle, which allows easy integration with your existing systems. This article provides practical advice and guidance for those intending to implement an energy management system (EnMS) and undergo certification to ISO 50001:2011. This article was written by Lead Assessor, Carolyn Campbell. She has worked for LRQA for nine years, assessing a wide variety of companies against ISO and has more recently been involved with the development of LRQA s assessment procedures to ISO Why is ISO good for you? Implementing an energy management system certified to ISO 50001, aids in the reduction of your energy consumption through a structured approach to monitoring your energy use, identifying areas for improvement and then implementing action plans to improve your energy performance. Stakeholder engagement, including employees, is a key part of the system requirements to ensure ongoing effectiveness. Certification to ISO enables you to demonstrate your commitment to your stakeholders for improving your energy performance and minimising your impact on the environment. Why ISO when there s ISO 14001? Although energy is included as an aspect in the majority of organisations ISO environmental management systems, no particular emphasis is shown to energy and it is often overlooked with organisations concentrating on the more obvious environmental aspects, such as chemicals and waste. ISO has been designed solely for the management of energy and includes a number of requirements not covered by ISO Implementing an energy management system certified to ISO 50001, includes the need to establish baseline(s) of energy usage and energy performance indicators as well as the usual objectives and targets which exist within an environmental management system. There are also specific clauses relating to design (covering facilities and production lines, etc) and procurement, including specifying energy purchasing requirements. 2 LRQA Guidance ISO 50001

3 By actively considering energy specifications, organisations are encouraged to not only consider where their current energy is from and any impacts or risks associated with that, but also where their energy could come from, such as renewable and on-site sources. Although organisations generally recognise that energy is a significant cost and an area where improvements could be made it is often neglected during the purchasing and design decisions. So, opportunities for ongoing energy efficiency improvements and financial savings are often missed. ISO specifically highlights these areas, so your energy management system will ensure that these opportunities are investigated and improvements realised. Before you start implementing Prior to establishing an energy management system you will need to gather background data on your energy usage and consumption so that you can determine your energy baseline(s). Without this information you will be unable to complete the requirements of the energy planning section of ISO Some energy baselines can be obtained online from your suppliers, such as electricity for those with half hourly meters. Where installed, automatic meter readings are also available, with larger organisations often installing these due to their Carbon Reduction Commitment (CRC) requirements. For other baselines the data can be logged using manual readings for electricity and gas usage, usually taking readings weekly or monthly depending on the usage level. Please note, the use of utility bills can cause problems for baseline data due to estimated readings and varying numbers of days covered in each bill period. Baselines can also be established for other forms of energy by using invoices from suppliers or fuel card data if measuring diesel usage. 4.1 General requirements As the starting point of the standard, this clause requires your organisation to establish, implement, maintain and improve an energy management system (EnMS). You must ensure your system is documented where it is a requirement within ISO One of the first things you need to decide as an organisation is the extent of your system, i.e. its scope and boundaries. Remember the definitions for these are given in the standard (e.g.... boundaries are the physical or site limits and/or organisational limits as defined by the organisation whereas the scope is the extent of activities, facilities and decisions that the organisation addresses through an EnMS, which can include several boundaries ). By setting a clear scope and boundaries you will enable everyone to understand the coverage of your system. The final part of 4.1 requires you to determine how you will meet the requirements of ISO 50001, in other words, planning what you are going to do. Organisations plan in different ways, but typical examples of a system establishment plan include the use of project management systems, simple flow diagrams or actions from a meeting. 4.2 Management Responsibility ISO clearly states the requirements for both top management (4.2.1) and the management representative (4.2.2). These two clauses go into much more detail than other standards such as ISO 9001 and ISO to ensure a consistent approach across organisations and that the necessary commitments are in place for an effective system. To meet these requirements you need to first agree these commitments (as stated in points a) to j) in clause 4.2.1) with your top management and make sure they can be demonstrated once your system is established. A management representative will need to be appointed by top management. This should be a person who has the appropriate skills and competence to carry out the required tasks. Their role should be clearly defined to cover points a) to h) in clause Again, your system should be able to demonstrate that these commitments are in place. Although not specified as documented requirements within the standard, documents such as job descriptions, meeting minutes and procedures often form part of the evidence within a system to demonstrate that these requirements are being met. Clause also includes a requirement for top management to approve the formation of an energy management team. Clause then includes the requirement for the management representative to identify a person(s) to work with them to support energy management activities. When deciding on your team you will need to take into account the size and complexity of your organisation. For smaller organisations the team may consist of one person, such as the management representative. LRQA Guidance ISO

4 And what you should be aware of when implementing it! 4.3 Energy Policy As with all the common management system standards, ISO requires your organisation to have an energy policy. This needs to be defined by your top management and must be appropriate to the nature and scale of your organisation s energy use and consumption. There are certain commitments which you need to clearly state within your energy policy. These are: A commitment to continual improvement in energy performance A commitment to ensure the availability of information and of necessary resources to achieve objectives and targets A commitment to comply with applicable legal and other requirements to which the organisation subscribes related to its energy use, consumption and efficiency. As well as these commitments the policy also has to meet the other requirements as defined in points a) to h) of clause 4.3. These include the need to ensure it supports the purchase of energy-efficient products and services, and design for energy performance improvement. This links well to the later clauses on design (4.5.6) and procurement (4.5.7). Your policy will need to be documented and communicated to all levels within the organisation. Unlike other common standards you can decide whether or not to make the policy available externally. The energy policy is the cornerstone of your system and should clearly lay out your commitments, aims and expectations for your energy management system. 4.4 Energy Planning Now that the basis has been established for your system we move onto the main planning part of the standard. You now need to conduct and document an energy planning process. This needs to be consistent with your policy requirements and drive continual improvement in your energy performance. It also needs to involve a review of your activities that can affect your energy performance (similar to an environmental aspect assessment in ISO 14001). Legal and other requirements applicable to your energy use, consumption and efficiency need to be identified (clause 4.4.2). These may well form part of a current EMS as ISO has a similar clause to identify applicable environmental legal and other requirements and as energy is generally treated as an environmental aspect there is no need to repeat the work. For the majority of organisations this is usually demonstrated through the introduction of a list, or register, of applicable legal and other requirements. Although the standard does not require this to be documented it is often the easiest way to demonstrate that you have identified all the necessary requirements. Once identified you need to ensure that your organisation has implemented any necessary requirements to make sure you are compliant. The next stage is to conduct your energy review (clause 4.4.3). This requires your organisation to analyse your energy use and consumption based on measurement and other data, i.e. identify current energy sources and evaluate past and present energy use and consumption. Once this analysis is complete you then need to use the output to identify the areas of significant energy use (facilities, equipment, systems, processes and personnel). Any applicable variables for these significant energy uses should also be identified, such as temperature or production levels. You then need to determine the current energy performance for significant energy uses and estimate your future energy use and consumption. Finally, your organisation is required to identify, prioritise and record opportunities for improving energy performance. These opportunities can include your energy sources, so you might want to consider potential renewable energy opportunities such as wind or solar. An energy baseline(s) needs to be established using the information from the initial energy review. These should cover a time period suitable for your organisation. The amount of energy baseline(s) depends upon the size and complexity of your organisation and how far you want to split up your energy use and consumption for monitoring of your energy performance. These baselines will be used to determine any improvements in energy performance as your system develops. Going forward, they need to be altered as required, e.g. due to major changes to processes, operational patterns or energy systems. 4 LRQA Guidance ISO 50001

5 And what you should be aware of when implementing it! Energy performance indicators (EnPIs) must then be set which are appropriate for monitoring and measuring your energy performance. You will also need to record your methodology for determining and updating these EnPIs. They will need to be reviewed and compared against your energy baseline(s) as appropriate to allow you to demonstrate improvement. Try to set these as stretching but realistic levels so they are neither too easily met, nor impractical to achieve. As with other management systems the final part of planning your system, is to set objectives and targets. Within ISO requirements there also needs to be documented action plans established, implemented and maintained to show how they will be achieved. The action plans should include allocation of responsibilities, timescales and statements on how any energy performance improvement will be verified and the method of verifying the results. 4.5 Implementation and Operation Moving on to the do part of the standard, ISO requires your organisation to use the action plans and other outputs form the planning process to implement and operate your system. Again, as with other standards, ISO requires your organisation to ensure that any person(s) working with energy usage on its behalf (including employees, agency workers and contractors) are competent on the basis of appropriate education, training, skills or experience. This clause (4.5.2) has specific requirements that any person working for or on behalf of your organisation must be aware of, as stated in points a) to d) and covering areas such as importance of conformity with the energy policy and EnMS requirements; their roles and responsibilities; the benefits of improved energy performance and the impact of their activities. The purpose of these requirements is to ensure that everyone plays an active part in energy management and is aware of their role and the potential benefits of good energy performance. You will also need to ensure that appropriate records are maintained. Internal communications should be used to make people aware of your energy performance and so that everyone working for, or on your behalf, has the ability to make comments or suggest improvements to the EnMS. An example of this could be improvement suggestion cards and boxes, or a section on an intranet site providing it s available to everyone. For external communications your organisation needs to decide whether to communicate externally about your energy policy, EnMS and energy performance. ISO is different to other management system standards in that it does not require you to make your energy policy publicly available. This decision needs to be documented and a method established and implemented if the decision is to communicate. Clause lists the documentation requirements for ISO These are the minimum that are required. The list includes part e) which simply states other documents determined by the organisation to be necessary, so effectively everything you think would be beneficial to document on top of the specified documents. The clause related to document control ( ) is similar to other management system standards such as ISO 9001, ISO and OHSAS This requires you to have a process in place to ensure that among other requirements, documents are controlled and changes identified. Similar to ISO requirements, ISO includes a clause (4.5.5) covering operational control. However, the areas of design and procurement are covered in separate clauses within ISO 50001, giving them more prominence and detailed requirements than in ISO The operational control clause requires your organisation to identify and plan your operations and maintenance activities which are related to your significant energy uses to ensure they are carried out under specified conditions. Examples of maintenance activities would be to minimise compressed air leaks, maintain steam traps and the set up and servicing of boilers. There is no separate clause for emergency preparedness in ISO 50001, but a note within the operational control clause states organisations may chose to include energy performance in determining how they will react to emergency situations. The design clause (4.5.6) refers to the design of new, modified and renovated facilities, equipment, systems and processes that can have a significant impact on your energy performance. It also looks at how your organisation considers energy performance improvement opportunities when carrying out these design activities. It does not cover design of your products. Where appropriate, you need to incorporate the results of an energy performance evaluation into the specification, design and procurement activities of the relevant project(s) and keep records of the design activity. LRQA Guidance ISO

6 And what you should be aware of when implementing it! Your organisation has to inform suppliers that procurement is partly evaluated on the basis of energy performance when procuring energy services, products and equipment that have, or can have, an impact on significant energy use. You also need to establish and implement criteria for assessing energy use, consumption and efficiency over the planned or expected operating lifetime when procuring energy using products, equipment and services which are expected to have a significant impact on your organisation s energy performance. Energy purchasing specifications need to be defined and documented. The guidance part of ISO states that you can use the specification proposed by an energy supplier for this requirement. A good example of a specification used includes organisations choosing to specify the use of renewable sources only for their electricity supply rather than from any fossil fuel sources. 4.6 Checking Progressing onto the checking part of the standard, clause requires your organisation to monitor, measure and analyse the key characteristics of your operations that determine energy performance. As a minimum these key characteristics must include those listed in parts a) to e) of this clause, including EnPIs and effectiveness of action plans. The results must be recorded and you will also need to define and implement an energy measurement plan. The level of measurement will vary for each organisation and could range from reading utility meters up to complete software application systems, consolidating data inputs and delivering automatic analysis. The measurement level should be appropriate to the size and complexity of your organisation. You also need to make sure that the data you use is accurate and repeatable, so will need to calibrate or otherwise verify the monitoring and measurement equipment used. Any significant deviations in energy performance (such as unexpected spikes in usage) should be investigated and responded to and there is a need to keep appropriate records. As with ISO and OHSAS there is a need to evaluate compliance with legal and other requirements (clause 4.6.2), this time focusing on energy. As inline with the requirements of other standards, you will need to plan and carry out internal audits to ensure that your system remains effective (clause 4.6.3). Also you are required to manage non-conformities, correction, corrective actions and preventive actions (clause 4.6.4). The final clause in this section of the standard covers the control of records (4.6.5). This is similar to the requirements within other management system standards as records need to be established and maintained in a way that they remain legible, identifiable and traceable to the relevant activity. 4.7 Management Review This clause is similar to the management review requirements within other common management system standards such as ISO 9001, ISO and OHSAS The areas to be included as inputs to the review are clearly described within the standard, along with the expected outputs. Management review is an essential part of an effective system. It allows top management to step back and take an overall look at your system, not only reviewing if it meets the requirements of the standard and legal and other requirements, but also whether it is suitable for your organisation and is delivering what you want from your EnMS. Although it is not specified what format management review should take, the majority of organisations use meetings to review their system to allow discussion and any necessary actions to be agreed. The frequency of management reviews varies from company to company, normally ranging from monthly to annually. When first establishing your system, and while your system remains immature, you should expect to have more frequent management reviews, often monthly or quarterly. As the system matures the time frames often move out for full reviews, but more frequent reviews remain necessary for some elements, such as energy performance, audit results and results from the evaluation of compliance with legal and other requirements. Many organisations use some form of existing management meetings for these interim management reviews. For your EnMS your energy team could be used, with reports going to top management for review if top management are not part of the energy team. Each organisation is unique and you need to find what works well for your organisations energy management. 6 LRQA Guidance ISO 50001

7 Why choose LRQA? LRQA Business Assurance helps you manage your systems and risks to improve and protect the current and future performance of your organisation. By understanding what really matters to your organisation and stakeholders, we help you improve your management system and your business at the same time. Thought leadership Our experts are recognised voices in the industry and regularly participate in the technical committees that improve and develop standards. Technical expertise The technical know-how and project management expertise of our globally renowned experienced and highly trained EnMS experts ensures that we can adapt our assurance services to your business needs. We bring international expertise and deep insight into the complex world of climate change backed with first class project management and communication skills. Acting with integrity With no shareholders of our own, we are independent and impartial in everything we do. We are committed to acting with integrity and objectivity at all times. Training Whether you are just beginning to implement your system, looking to improve what you have or an experienced practitioner wanting to gain a formal qualification we have a course to meet your objectives. Our public events are held throughout the UK and give you the added benefit of sharing experiences with other delegates while our in-company courses are tailor-made to suit. For more information on LRQA services visit LRQA is dedicated to supporting our clients to help them make the most of their management systems. Our website: contains useful advice to organisations looking at implementing management systems. Contact us T E W Lloyd's Register Quality Assurance Limited Hiramford, Middlemarch Office Village, Siskin Drive, Coventry, CV3 4FJ, UK Lloyd s Register Quality Assurance Limited is a member of the Lloyd s Register Group Registered office: 71 Fenchurch Street, London EC3M 4BS Registered number: Lloyd s Register and LRQA are trading names of the Lloyd s Register Group of entities. Services are provided by members of the Lloyd s Register Group. For details, see Care is taken to ensure that all information provided is accurate and up to date. However, LRQA accepts no responsibility for inaccuracies or changes to information. LRQA Lloyd s Register Quality Assurance Limited. All rights reserved. Pub. Oct 2011

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