Businesses Show the Way in Fight against Climate Change by Embracing Energy Standard as Good for the Bottom Line

by | May 19, 2016

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At a time when some in Congress have attacked environmental standards as a burden to business, companies are showing that they can—by implementing an internationally recognized energy standard—reduce energy waste and harmful pollution while improving their own bottom lines.

Nine companies have become the latest businesses to join the North American Energy Management Pilot Program, a voluntary, cross-border initiative designed to help them cut energy costs and boost their competitiveness while reducing the carbon pollution that drives dangerous climate change.

The companies—3M, ArcelorMittal, BMW, Cargill, Cummins, Ingersoll Rand, Intertape Polymer Group, New Gold, and Titan America–could produce significant cost savings and carbon reductions. Collectively, they consume the equivalent energy of more than 1.2 million U.S. households annually.

Under the program run by the Commission for Environmental Cooperation in collaboration with the U.S. Department of Energy and its counterparts in Canada and Mexico, the participants receive training and technical assistance to achieve an energy performance standard known as ISO 50001 and, upon demonstrating sustained energy savings, earn Superior Energy Performance (SEP) certification. I have been working with International Organization for Standardization (ISO) on developing and improving 50001, and its associated guidance standards, since 2009.

The voluntary ISO 5001standard provides a framework for organizations to better manage and continually improve their energy performance, including increasing the energy efficiency of their operations. Facilities in the U.S. Department of Energy-managed SEP program have met the ISO standard and improved their energy performance up to 30 percent over three years. For example, nine SEP-certified facilities have already saved, on average, more than $500,000 a year from improvements with little or no capital costs.

Business participation in the cross-border energy-saving program highlights the kind of international cooperation that is critically needed to combat global climate change.

The economic benefits

It also underscores business’ understanding of the significant economic benefits from smarter energy use and the potential economic costs of failing to respond to climate danger. The bipartisan business-focused Risky Business Project warned of the potential costs to the U.S. economy from lower crop yields in the Midwest to massive property losses from rising sea levels on the East and Gulf Coasts.

The international standards are important to business, as the standards-setting International Organization for Standardization has noted, because they “ensure that business operations are as efficient as possible, increase productivity and help companies access new markets.”

The American National Standards Institute (ANSI) has called standards “essential tools helping today’s businesses stay innovative, reduce costs, improve quality and market their products or services.”

“They help break down barriers to trade, provide industry stability and encourage commerce,” ANSI noted.

Earlier this year, I co-authored an op-ed with ANSI’s Jason Knopes with the title: “Energy efficiency standards help businesses thrive and consumers save” that reaffirmed the point that when specific standards are analyzed for their effects on the environment, jobs, and on economic benefits versus costs, it’s apparent that standards overcome failures of the market and enhance economic growth.

Successful savings

The North American Energy Management Pilot Program‘s benefits have been demonstrated. For example, Cummins, Inc., which implemented an energy management system at its Rocky Mount, N.C. engine manufacturing facility, improved energy performance by 12.6 percent, saving the company $716,000 annually. (In joining the pilot program, Cummins will now participate with three of its Mexico manufacturing facilities.)

General Dynamics improved the energy performance at an ammunition plant in Scranton, Pa. by about 12 percent for a projected annual energy cost savings of $956,000, using the ISO energy management standard.

And Nissan improved the energy performance of its vehicle assembly plant in Smyrna, Tenn., by about 7.2 percent. Its annual energy bill as a result is projected to drop $938,000.

Other success stories can be found on the DOE website.

Since publication of the ISO 50001 standard in 2011, more than 15,000 facilities worldwide are realizing average energy-performance improvements of 10 percent or more, according to the U.S. Energy Department. Success through 50001 is not a onetime deal. The standard emphasizes continual improvement in energy performance companies that comply must commit to achieving greater energy savings every year.

Business leaders understand. Smarter energy use is good not only for our health and the environment.

It’s also good for business.

This story has been published with permission by the Natural Resources Defense Council.

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