Market Forces at Work - ISO 50001

Market Forces at Work - ISO 50001

In parallel with the geopolitics of energy, there is the market sector, driven by supply and demand and competition. These forces are in play across national boundaries and although clearly sensitive to what governments and government policy do, the markets are more influenced by competitive positioning and market share. This market-driven, energy related action concept is evident when it comes to companies, and energy consuming industries in particular. These entities are looking for an advantage to leverage energy use. This may mean reducing energy use or becoming more efficient to save money, thereby increasing profitability. Or they may wish to actually sell this improved efficiency to gain more market share and/or be able to sell a product at a premium. An excellent example of this would be a company who switches to renewable energy sources. Such a switch can improve efficiency, reduce their carbon footprint, and improve their brand.

Concentrated men working together near solar panels

Credit: Gustavo Fring from Pexels is licensed under CC0

Companies strive to integrate concepts and strategies through effective management processes. Doing things ad hoc without logic, organization, and follow up poses risks and introduces inefficiencies. As a result, a company will look for management techniques, which they can combine with technology, to increase performance in a given area. This is quite true with energy use. In searching for such approaches, companies, especially multinationals, will look for global scale, recognized standards, and protocols. By creating an international standard, it provides an approach that could be replicated, and would be recognizable to others, thereby increasing understanding, transparency, and awareness. A common way to create such global processes is through international standards. And the International Organization for Standardization (ISO) is the premier organization for developing standards. ISO standards are market-driven, voluntary standards created by groups of experts and stakeholders. If you wish, you can learn more about ISO at their website.

The importance of these standards is that they help provide a pathway for organizations, typically companies and industry, to improve their performance in a variety of areas using voluntary, market-driven pathways in lieu of, or in conjunction with, policy and regulation driven by government. Over the years ISO has developed thousands of standards to help bring consistency across the globe. ISO standards cover a wide array of topics from management approaches to specific products. You depend on the consistency offered by ISO standards every day and may not even be aware of it. For example, it is because of standardization that a credit card magnetic strip is in the same place on the card and configured in such a way that card readers around world can recognize nearly any type of credit, debit, or charge card.

Specifically, ISO 50001 addresses energy management. ISO 50001- “Energy management systems – Requirements with guidance for use” was initially created in 2011 and updated in 2018. This is a management system standard, not a technology system. In other words, it provides a framework for organizations to manage their energy use in a way that brings efficiency and enhanced performance. Whether it is to improve energy efficiency, expand the use of renewables, or reduce energy use overall, some contend that allowing organizations to set their own goals, procedures, and approaches will lead to better performance than “one size fits all” policy or regulation. In reality, the answer is a mix of the two.